Key Takeaways
Coinbase users can now borrow USDC against bitcoin at a fixed rate with a set repayment date, through Morpho's Midnight protocol.
Coinbase's existing variable-rate loans have more than $1.4 billion outstanding against about $3 billion in collateral.
Morpho says Coinbase is the first major consumer platform to offer Midnight loans at scale.
Coinbase has added fixed-rate loans backed by bitcoin, letting users borrow USDC with the interest rate and repayment date locked in on day one, The Block reported in a September 22 exclusive. The loans run through Midnight, a fixed-rate lending protocol Morpho launched on Base in July.
Until now, borrowing on Coinbase meant variable rates that move with the market. Those loans, built on Morpho Blue, have grown to more than $1.4 billion outstanding against roughly $3 billion in collateral, Coinbase said. Users can now choose either one.
How the fixed-rate loans work
Rates are set by supply and demand, with lenders and borrowers placing offers on an onchain order book, and Coinbase declined to share current rates. Loans come due at the end of the current month or the next one, which means the last Friday of the month. If a borrower does not repay by then, the lender has a claim on the bitcoin posted as collateral. Coinbase runs the app, Morpho runs the protocol, and transactions settle on Base. Jacob Frantz, Coinbase's yield and investments product lead, said fixed-rate borrowing gives customers "even greater choice over how they manage that credit."
A small start on a large platform
Midnight holds about $30 million in deposits so far, a Morpho spokesperson said, compared with $16 billion in deposits across Morpho Blue. Morpho says Midnight could later support structured credit and loans backed by tokenized real-world assets. Coverage from CoinDesk followed the next day.
The most notable part of this is predictability. A known rate and a known due date make onchain credit look a lot more like a bank loan. It is Coinbase's second big product move in a week, after it filed with the CFTC to offer single-stock perpetual futures, and Morpho also powers the yield inside World's new World Money app.
People Also Ask
How do Coinbase bitcoin-backed loans work?
Users post bitcoin as collateral and borrow USDC without selling it. They can now choose a variable rate through Morpho Blue or a fixed rate and due date through Morpho Midnight.
What is Morpho Midnight?
It is a fixed-rate onchain lending protocol Morpho launched on Base in July 2026, where lenders and borrowers set rates through an order book.
What happens if you do not repay a Coinbase fixed-rate loan?
If the loan is not repaid by the maturity date, the lender has a claim on the bitcoin posted as collateral.
How big is Coinbase's crypto lending business?
Coinbase's variable-rate loans have more than $1.4 billion outstanding against roughly $3 billion in collateral.