Coinbase Locks the Rate: Fixed-Rate USDC Loans Land for Bitcoin Holders on Morpho Midnight 🔒

Coinbase has rolled out fixed-rate USDC loans backed by cbBTC, giving borrowers a way to unlock liquidity against their bitcoin without selling. The product runs through Morpho Midnight on Coinbase's Base network and locks both the interest rate and repayment date when a loan is initiated, a departure from the variable-rate model that has dominated on-chain lending.

The exchange already offers variable-rate borrowing through Morpho Blue, where users currently hold more than $1.4 billion in outstanding loans backed by roughly $3 billion in collateral. The new fixed-rate option sits alongside that product. Coinbase controls the customer experience, Morpho provides the lending protocol and Base handles settlement. Morpho Midnight launched on Base in July, and the Coinbase deployment is its first enterprise-scale integration.

"Coinbase Borrow gives our customers access to liquidity without having to sell their assets, and fixed-rate borrowing gives them even greater choice over how they manage that credit," Coinbase yield and investments product lead Jacob Frantz said. Morpho Midnight holds $30 million in deposits, while Morpho Blue has $16 billion across integrations, according to figures cited in the announcement.

Coinbase first launched Bitcoin-backed borrowing on Base in early 2025 using Morpho as its technology provider and has since expanded accepted collateral beyond bitcoin to assets including XRP and Dogecoin. The fixed-rate push comes against a backdrop of earlier stress in the loan book: a sharp drop in $BTC and $ETH prices in February drove record liquidations across Coinbase's borrowing product, underscoring the volatility risk that comes with crypto-collateralized credit.

Fixed-rate terms and defined maturities are foundational to traditional credit markets, and bringing them to a Coinbase-scale platform marks a notable step for on-chain lending, which has largely run on variable rates. Morpho framed the build's pace as evidence that fintechs can layer sophisticated credit products atop open infrastructure without rebuilding the underlying stack, and said the protocol is designed to eventually support tokenized stocks and other real-world assets beyond $BTC.