Coinbase Expands Crypto Credit with New ETH-backed Loans
Key Takeaways
- Coinbase has expanded its presence in the crypto credit sector with its new ETH-backed loans scheme for eligible US customers.
- Customers can borrow up to $1 million worth of USDC by keeping their ETH tokens as collateral.
- This loan is for those users seeking liquidity without liquidating their crypto assets for purposes like home purchases or debt refinancing.
- The loans are disbursed in USDC. Users can borrow USDC worth up to $1 million, with initial borrowing capacity generally up to a 75% loan-to-value (LTV) ratio.
- You can borrow against their ETH up to a maximum loan-to-value ratio (LTV) of 75%, with liquidation set to trigger at 86% LTV to manage price volatility risk.
Coinbase has expanded its presence in the crypto credit sector with its new ETH-backed loans scheme. The scheme is especially meant for eligible US customers. With this loan scheme, customers can borrow up to $1 million worth of USDC by keeping their ETH tokens as collateral.
The loans are operated through Morpho, a decentralized lending protocol on Coinbase’s Layer 2 network called Base, with Coinbase providing a centralized user interface for the service.
With this new loan scheme, Coinbase has solidified its stance as a strong presence in the DeFi credit market. This loan is aimed at users seeking liquidity without liquidating their crypto assets for purposes like home purchases or debt refinancing.
How do ETH-backed Loans on Coinbase Work?
Here is a step-by-step guide on how ETH-backed loans on Coinbase work.
- Eligibility
All eligible US customers who hold ETH on Coinbase can apply for this loan. However, residents of New York are not currently eligible to apply.
- Collateral
Users can get the loans by keeping eTH or WETH as collateral. The ETH is transferred on-chain into a smart contract managed by the Morpho lending protocol on Coinbase’s Base Layer 2 network.
- Loan Disbursement
The loans are disbursed in USDC. Users can borrow USDC worth up to $1 million, with initial borrowing capacity generally up to a 75% loan-to-value (LTV) ratio.
- Immediate Liquidity
After the processing, the loan amount is immediately disbursed into the borrower’s account. That means these loans provide immediate liquidity.
- Interest Rates
The interest rates are volatile and are determined by the supply and demand on the Morpho protocol.
ETH-backed loans are now on Coinbase.
— Brian Armstrong (@brian_armstrong) November 20, 2025
You can use your ETH as collateral to borrow USDC.
Ethereum. https://t.co/dJAoyIufNH
Eligibility Requirements for ETH-backed Loans on Coinbase
To become eligible for availing Coinbase’s ETH-backed loans, you should be a US citizen residing anywhere other than New York. Users must hold Ethereum (ETH) as collateral. You can borrow against their ETH up to a maximum loan-to-value ratio (LTV) of 75%, with liquidation set to trigger at 86% LTV to manage price volatility risk. You should also have an account in the Morpho protocol on Coinbase’s Layer 2 network, Base.
The Bottom Line
Coinbase’s new venture of ETH-backed loans is a step toward making the exchange a prominent name in the crypto credit sector. The exchange had already started a BTC-backed loan program and is planning to roll out such loan schemes featuring other cryptocurrencies.
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