Coinbase Expands Its Cryptocurrency-Backed Lending Product in the US to Include XRP, Cardano’s ADA and expanding access to a service it billed as a way for customers to unlock liquidity without selling their holdings.
The product allows users to post cryptocurrencies as collateral and borrow up to $100,000 in USDC stablecoin from Circle. Loans are routed through Morpho, a decentralized lending protocol, meaning borrowing mechanisms are managed on-chain rather than through Coinbase’s own balance sheet.
The service is available throughout the United States, except New York.
The move integrates some of the highest-selling crypto tokens at retail into a product that previously focused on bitcoin and ether. While Ether and ADA holders can already earn yield by staking on their native networks, assets like XRP, DOGE, and Litecoin do not offer built-in reward mechanisms.
For these investors, borrowing against their holdings has become one of the few ways to access liquidity without exiting the position.
Coinbase is also expanding the potential pool of collateral on its platform. The exchange reported holding $17.2 billion in XRP as of Dec. 31, according to an SEC filing, making the token one of the largest assets in customer accounts.
Cryptocurrency-backed loans have long been marketed as a tax-efficient strategy because borrowing against an asset does not generate capital gains in the same way as selling.
But this structure carries significant risks when markets move quickly. If the value of the collateral drops too much relative to the loan balance, the position can be liquidated, meaning a third party can pay off the debt and seize the collateral at a reduced price.
Coinbase applies an additional buffer when users take out a loan to reduce the risk of liquidation and sends notifications as the threshold approaches. Nonetheless, the exchange also warned that collateral used through the product was shrouded, a process that allows tokens like XRP to exist on Ethereum-compatible networks.
