Coinbase has opened crypto-backed lending to UK users for the first time, powered by the same Morpho protocol that processed $2.17 billion in US loans before the UK saw a single one.
Key takeaways:
UK users can now borrow USDC against BTC, ETH, and cbETH as collateral.
Maximum loan size: $5,000,000 USDC against BTC collateral.
86% LTV ratio must be maintained - liquidation triggered if breached.
$2.17B in US loan originations since January 2025 launch.
Coinbase One members earn up to 3.5% APY on received USDC.
Coinbase has launched crypto-backed loans in the United Kingdom, allowing users to borrow USDC against their Bitcoin, Ethereum, and cbETH holdings without selling their positions. According to the official press release, the product, which went live on April 20, processes loans in under a minute and carries no fixed repayment schedule, users maintain the loan for as long as they choose, provided they keep their loan-to-value ratio below the 86% liquidation threshold.
The loans are powered by Morpho, an open-source lending protocol built on Base, Coinbase's own Layer 2 blockchain. Once a user selects their collateral and loan amount, the assets are transferred to a Morpho smart contract and USDC is disbursed directly to their Coinbase account within seconds, convertible to GBP from there. Interest rates are variable and recalculated automatically by the protocol with each block on the Base chain, meaning they can shift every few seconds based on market demand on both the borrowing and lending sides.
$2.17 billion in the US before the UK even launched
The UK rollout follows the product's January 2025 debut in the United States, where total loan originations reached $2.17 billion as of April 14, 2026, across just 15 months. Speaking to CNBC, Keith Grose, Coinbase's UK Chief Executive, described the demand as coming from everyday users rather than institutional borrowers: "People are using it to put down a down payment on a house, buy a car, everyday spending against assets they want to hold for the long run. We have people who started rebuilding their house after the LA fire."
Grose placed the product squarely in the context of financial access. "This is the type of experience that ultra high net worth people have had for years with private bankers," he said, "and we're bringing it to the masses."
https://www.youtube.com/watch?v=rSK2q2mmNO0
Who is funding the loans
The lending side of the marketplace is funded by both institutional investors and retail participants who deposit capital into the Morpho protocol in exchange for yield. Coinbase One members receiving USDC through the product are automatically enrolled in a 3.5% APY rewards rate unless they opt out.
The risk picture comes down to collateral volatility against a fixed liquidation threshold. The sharpest version of that risk played out in the real market this year, Bitcoin fell from $92,000 in late 2024 to below $50,000 by early February 2026, a move that would have pushed any loan originated near the top toward its liquidation threshold within weeks. When pressed on that scenario in the CNBC interview, Grose said: "Yes, you're right. There are risks associated with this, and we need to make sure users understand it." The US default rate has remained under 1% since launch, though that period largely coincided with a rising Bitcoin market.
On the legal side, Bitcoin is classified as a commodity under both US and UK property law, meaning seized collateral would be liquidated by the protocol rather than going through traditional insolvency proceedings. Coinbase surfaces liquidation risk through real-time loan health monitoring in the app, plus email and text alerts as users approach the threshold.
What the UK launch means for Coinbase's broader push
The UK holds a specific place in Coinbase's international strategy. Grose described it as "our most important market outside the US", the company's largest by revenue and employees outside its home market, and the location of its first international office when it arrived in 2015. The crypto-backed loan product is the latest in a sequence of UK launches that includes savings accounts in November 2025, DEX trading in April 2026, and a successful FCA registration in February 2025.
The UK launch is the first step in a stated international expansion with no confirmed timeline beyond "the near future." What Coinbase has in its favor is a proof of concept that processed $2.17 billion across 15 months with a sub-1% default rate, in a market that included Bitcoin's sharpest correction in two years. Whether UK users, regulators, and the lenders funding the other side of the marketplace draw the same conclusions from that track record is what the next 15 months will answer.