Coinbase users can now borrow USDC against bitcoin at a fixed rate

Nasdaq-listed exchange Coinbase COIN$199.71·Market Closed now allows its users to borrow dollar-pegged stablecoin USDC agains their bitcoin holdings with no surprises on what they’ll pay in interest.

The exchange has rolled out fixed-rate, bitcoin-backed USDC loans, with the interest rate and repayment date set at the time of borrowing, an alternative to the floating-rate loans Coinbase already offers.

“The move takes onchain borrowing beyond the predominantly variable-rate model, giving users greater certainty over the cost and duration of their borrowing,” according to an announcement on Tuesday.

The fixed-rate offering runs on Morpho Midnight, a decentralized, non-custodial lending protocol for fixed-rate and fixed-term crypto loans launched in July this year. It settles transactions on Coinbase’s Ethereum layer 2 network Base.

It marks a meaningful shift from how Coinbase’s lending has worked until now. It’s existing loans run on the Morpho Blue protocol, where rates change, determined by demand and supply conditions and can climb when borrowing demand spikes. The new fixed-rate option sits alongside this floating one, which has more than $1.4 billion in active loans backed by nearly $3 billion of collateral.