Coinbase has launched its crypto-backed lending product for UK customers with the underlying infrastructure provided by the DeFi lending protocol Morpho.
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UK users can now borrow USDC against Bitcoin and Ethereum holdings directly through Coinbase's interface — but the loan itself is processed on-chain, not on Coinbase's balance sheet.
The mechanics are straightforward. When a user opens a position, their collateral moves into a Morpho smart contract on the Base network. The USDC is then disbursed from the Morpho protocol to the user's Coinbase account. Coinbase is the front-end; Morpho is the book.
Rather than running a proprietary lending operation — which requires capital allocation, credit risk management, and a balance sheet willing to absorb losses — Coinbase plugs into an existing on-chain liquidity pool.
The result is a product that can scale without the overhead of a traditional lender, and that operates 24/7 with no fixed repayment schedule and algorithmically set rates based on real-time supply and demand.
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$2.17 Billion in the U.S. Since January 2025
The UK launch is the first international rollout of a product that has been live in the United States since January 2025. U.S. loan originations through the Coinbase-Morpho integration have crossed $2.17 billion.
That figure establishes the product as more than a pilot — it is now a meaningful revenue line being carried into new markets. The expansion model is notable for its simplicity.
Coinbase does not need to rebuild a lending operation from scratch in each new jurisdiction. It connects its regulated, local-facing product to the same permissionless DeFi infrastructure. Market entry becomes a compliance and distribution problem, not an infrastructure one.
What This Means for Brokers Offering Credit
For firms that provide margin lending or leveraged products to retail clients, the comparison is uncomfortable. Coinbase is offering instant disbursement, no repayment schedule, and rates set by the market rather than a credit committee.
Traditional brokers carry balance sheet risk, operate within fixed settlement windows, and price credit based on internal models that rarely update in real time.
This is part of a broader push by Coinbase to build a full consumer finance stack in the UK — following its FCA registration and the recent launches of savings products and DEX trading access.
The lending product is the credit layer of that stack. The structural point is worth stating plainly: a regulated exchange is now using open-source financial infrastructure to offer credit products that most traditional lenders cannot replicate on comparable terms. That gap will not close quickly.
