What to know : Coinbase is expanding its U.S. crypto-backed lending service to include XRP, dogecoin, Cardano's ADA and litecoin, allowing more customers to borrow against their holdings without selling. The loans, capped at $100,000 in USDC and routed on-chain through the Morpho protocol, are available nationwide except in New York and use wrapped versions of some tokens as collateral. While marketed as a tax-efficient way to access liquidity, the product carries liquidation risk if collateral values drop and may trigger taxable events when assets are converted into wrapped tokens.
Coinbase is expanding its crypto-backed lending product in the U.S. to include XRP, , Cardano's ADA and , widening access to a service it has pitched as a way for customers to unlock liquidity without selling their holdings.
The product allows users to post crypto as collateral and borrow up to $100,000 in Circle’s USDC stablecoin. The loans are routed through Morpho, a decentralized lending protocol, meaning the borrowing mechanics are handled on-chain rather than through Coinbase’s own balance sheet.
The service is available across the U.S., excluding New York.
The move brings some of crypto’s most retail-heavy tokens into a product that previously focused on bitcoin and ether. While Ethereum and Cardano holders can already earn yield through staking on their native networks, assets like XRP, DOGE and Litecoin do not offer built-in reward mechanisms.
For those 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 it held $17.2 billion worth of XRP as of Dec. 31, according to an SEC filing, making the token one of the larger assets sitting in customer accounts.
Crypto-backed loans have long been marketed as a tax-efficient strategy, since borrowing against an asset does not trigger capital gains in the same way selling does.
But the structure comes with sharp risks when markets move quickly. If the value of the collateral falls too far relative to the loan, the position can be liquidated, meaning a third party can repay the debt and seize the collateral at a discount.
Coinbase applies an extra buffer when users take out a loan to reduce liquidation risk and sends notifications as the threshold is approached. Still, the exchange has also warned that collateral used through the product is wrapped, a process that allows tokens like XRP to exist on Ethereum-compatible networks.
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