Coinbase Expands Morpho Loans to Enable Borrowing Against Bitcoin at a Fixed Rate.

On Tuesday, Coinbase announced fixed-rate loans that let users borrow the USDC stablecoin against Bitcoin with the interest rate and repayment date locked in from the start. The product is powered by decentralized lending protocol Morpho and marks the first enterprise-scale deployment of Morpho Midnight, a newer version of the protocol built to support fixed rates and defined maturities. For Coinbase users, the launch adds a certainty-focused alternative to on-chain borrowing, where rates have historically moved with market conditions.

A shift away from variable-rate on-chain lending

The fixed-rate option departs from the model that has dominated on-chain lending, where borrowing costs float with market conditions and can climb unpredictably. Instead of exposing borrowers to rate swings over the life of a loan, Coinbase’s new product gives users a way to lock both cost and duration at the start.

That structure is common in traditional credit markets, where fixed rates and set repayment dates allow borrowers to plan cash flows in advance. Bringing those terms to a platform of Coinbase’s size is a notable step for on-chain lending, which has largely run on variable rates until now.

Morpho Midnight, Coinbase’s app and Base settlement

The launch is the first enterprise-scale deployment of Morpho Midnight, with loans priced and executed natively on the cryptocurrency network. Coinbase controls the user experience through its app, while Morpho provides the underlying credit infrastructure and Coinbase’s Base network handles settlement.

The fixed-rate option sits alongside Coinbase’s existing variable-rate loans, which are also powered by Morpho. Coinbase first launched Bitcoin-backed borrowing on Base in early 2025, relying on Morpho as its technology provider.

That business has grown substantially, now exceeding $1.4 billion in active loans backed by roughly $3 billion in collateral, according to Morpho. Coinbase has steadily widened the offering since launch, at one point undercutting rivals on servicing costs for U.S. borrowers and later expanding the collateral it accepts beyond Bitcoin to assets including XRP and Dogecoin.

Liquidation risk remains a central issue

The lending push has not been without turbulence. A sharp drop in Bitcoin and Ethereum prices back in February drove record liquidations across Coinbase’s loan book, underscoring the risk that comes with borrowing against volatile collateral.

For borrowers, fixed rates reduce uncertainty about interest costs and repayment timing, but they do not remove the risk tied to the value of the assets used as collateral. When Bitcoin or other accepted collateral moves sharply, borrowers may still face liquidation pressure.

What the build signals for on-chain credit

Morpho framed the speed of the build as evidence that fintechs can layer sophisticated credit products atop open infrastructure without reconstructing the underlying stack. The Coinbase launch shows how a major consumer-facing platform can add fixed-rate, term-based credit while relying on decentralized lending infrastructure for settlement and execution.

While the integration begins with Bitcoin, Morpho said the protocol is designed to eventually support tokenized stocks and other real-world assets. If that expansion happens, the combination of fixed rates, defined maturities and collateralized borrowing could move on-chain credit closer to structures already familiar from traditional finance.

Coinbase’s announcement also referenced Myriad, including the prompt “How high will Bitcoin go?”, and the Daily Debrief Newsletter.