Coinbase has launched Ethereum-backed loans for eligible U.S. customers, allowing users to borrow up to $1 million in USDC without selling their ETH holdings, the cryptocurrency exchange announced.

Coinbase lets ETH holders borrow millions without selling

The service represents one of the exchange’s largest decentralized finance-integrated offerings to date, according to the company. The launch follows Coinbase’s recent increase of its Bitcoin-backed loan limit to $5 million several weeks prior.

The loan program operates through Morpho, a lending protocol on Base, Coinbase’s Layer 2 network. Coinbase serves as the access point while loans are executed through Morpho’s smart contracts, enabling users to access decentralized finance liquidity through a centralized platform interface.

The service is available in most U.S. states, excluding New York due to regulatory restrictions. Users deposit ETH as collateral and receive USDC without triggering a taxable event, differentiating the service from direct cryptocurrency sales.

Borrowers must maintain their loan-to-value ratio below 86%, at which point positions face automatic liquidation due to cryptocurrency price volatility. Coinbase stated the feature will expand to include additional assets, including cbETH, the platform’s staked-ETH derivative.

Onchain lending across the Base ecosystem has surpassed $1.25 billion, driven by increased activity in institutional and retail credit markets, according to network data. Morpho has experienced notable inflows this week as traders and long-term holders utilize collateralized borrowing to access liquidity while maintaining cryptocurrency exposure.

The expansion positions Coinbase within the growing cryptocurrency-native credit market as the exchange increases its decentralized finance integration and borrowing options for major cryptocurrencies.