Coinbase Enables Bitcoin-Backed USDC Loans on Base Layer 2 Network
Leading cryptocurrency exchange Coinbase has made another bold move to expand its foothold in the burgeoning decentralized finance (DeFi) space. Leveraging its recently launched Base layer 2 network, Coinbase now allows users to borrow up to $100,000 in USDC stablecoin using their Bitcoin holdings as collateral.
Morpho Protocol Powers Bitcoin-Backed Loans
To facilitate these Bitcoin-backed loans, Coinbase has partnered with Morpho, a specialized on-chain lending protocol. By wrapping Bitcoin into Coinbase’s native cbBTC token, users can seamlessly deposit their crypto as collateral on Morpho and receive USDC loans directly into their Coinbase accounts within minutes.
The integration of Bitcoin-backed loans on Coinbase is TradFi in the front, DeFi in the back. This offering illustrates Coinbase’s continued commitment to bringing our customers’ financial lives on-chain.
– Max Branzburg, VP of Product at Coinbase
Over-Collateralized Loans Ensure Security
To mitigate risk and protect both lenders and borrowers, these Bitcoin-backed loans are over-collateralized at a minimum ratio of 133%. This means that for every $100 borrowed in USDC, users must provide at least $133 worth of Bitcoin as collateral.
While currently only available in the United States (except New York), Coinbase plans to expand this offering to more jurisdictions and support additional collateral assets in the near future.
Base Network Thrives as DeFi Powerhouse
The introduction of Bitcoin-backed loans on Base further cements Coinbase’s layer 2 network as a formidable player in the DeFi landscape. With its rapidly growing user activity and expanding suite of innovative financial services, Base is quickly outpacing established competitors like Arbitrum and Optimism.
- Base offers native Bitcoin integration through cbBTC wrapping
- Coinbase continues to push DeFi boundaries despite regulatory pressures
The Future of Finance Powered by Crypto
As Coinbase relentlessly pursues its mission to create an open financial system for the world, initiatives like Bitcoin-backed loans on Base showcase the transformative potential of cryptocurrency and blockchain technology. By bridging the gap between traditional finance and DeFi, Coinbase is paving the way for a more inclusive, efficient, and transparent financial future.
Key Takeaways
- Coinbase now offers Bitcoin-backed USDC loans on its Base layer 2 network
- Morpho lending protocol powers the over-collateralized loans
- Base continues to thrive as a leading DeFi platform with innovative offerings