Coinbase crypto-backed USDC loans launch in the UK
Coinbase has expanded its crypto-backed USDC loans to UK residents, letting users borrow USDC without selling BTC or ETH. The service supports BTC, ETH, and cbETH as collateral and is powered by Morpho on the Base network.
Borrowing capacity can reach up to $5 million in USDC for BTC-backed loans, with collateral locked in a Morpho smart contract until repayment. Coinbase says loans can be opened almost instantly, but repayment is not scheduled; liquidation can be triggered if the loan-to-value ratio breaches a threshold, with a liquidation penalty fee.
Coinbase also shared traction data: total loan originations through Coinbase on Morpho exceed $2.17B USDC as of April 14, 2026, and it plans further country rollouts. Traders should watch for increased USDC on-chain use from collateralized borrowing flows and for liquidation-driven volatility tied to BTC/ETH collateral.
This move builds on Coinbase’s UK regulatory progress, including its FCA crypto service provider registration in February 2025.
Bullish
For USDC specifically, Coinbase’s expansion of crypto-backed USDC loans into the UK can boost stablecoin demand and on-chain utility. Faster borrowing access and the ability to use BTC/ETH (plus cbETH) as collateral may increase the flow of USDC into DeFi/on-chain usage, supporting USDC demand over time.
In the short term, liquidation mechanics (LTV thresholds and penalty fees) can create periodic volatility in positions and collateral markets, but that does not directly imply reduced USDC usage. Netting both effects, the likely impact on USDC is positive: more borrowers convert pledged collateral into USDC, raising utilization.