Coinbase Introduces Simple Loan System For Crypto Fans

Coinbase has announced a new service that helps Americans borrow money using Bitcoin. The exchange said on Thursday that people can now borrow up to $100,000 in USD Coin (USDC) by using their Bitcoin as a backup. This service is possible through a partnership with Morpho, a system built on Coinbase’s Base network.

According to the update, this is a new way for crypto users to get funds without selling their Bitcoin. Instead of checking credit scores, Coinbase will ask users to pledge their Bitcoin as security for the loan. The company said this will give users an easier option to unlock funds when they need them.

Morpho System Handles Collateral If Bitcoin Value Falls

According to Coinbase, this loan process is unique. The company said customers must use Bitcoin worth more than the loan amount. For example, a $100,000 USDC loan needs Bitcoin of equal or higher value as collateral. If Bitcoin’s price falls, Morpho’s system will step in to sell part of the collateral to cover the loan.

Coinbase also explained that these loans come with flexible repayment terms. This means borrowers can repay anytime, without strict deadlines. The service will be available in most of the United States, except for New York state.

Borrowing with Coinbase is simple. According to Coinbase, customers pledge their Bitcoin, which is changed into the firm’s Wrapped Bitcoin (cbBTC). This cbBTC is then sent to Morpho, and the loan is given to the customer in USDC. Coinbase said that cbBTC, launched last September, allows Bitcoin to be used directly on the blockchain without leaving the Coinbase app.

Coinbase said the new service will remove the hard steps that confuse people who are new to crypto loans. Coinbase shared that working with Morpho has helped them create a simple and easy process for all users.

Coinbase Aims To Change How People Handle Money

The new service is part of Coinbase’s plan to change how people handle money. The company shared that these loans are a clear and user-friendly choice compared to traditional banks. Borrowers can use the loan for many purposes, like buying items or even trading crypto.

Some experts believe the loan initiative is an important step for decentralized finance. With tools like Morpho and Coinbase’s app, more people can use crypto loans without needing special knowledge.

In other news, Coinbase recently won a court case against the Securities and Exchange Commission (SEC). A judge said the SEC had acted unfairly when it refused to create clear rules for cryptocurrencies. This decision was seen as a success for Coinbase and the crypto industry.

Coinbase hopes this loan service will encourage more people to explore DeFi. It aims to help users get more from their crypto while keeping their assets safe by offering easy borrowing options. This step shows how Coinbase is working to bring new financial tools to everyday users.