Coinbase is giving its US customers a new way to put their USDC to work. The exchange announced on Wednesday that it's launching USDC-backed loans, allowing users to borrow against their stablecoin holdings without selling them.
How the loans work
The product is essentially a collateralized loan. Users deposit USDC as collateral and receive a loan in US dollars or USDC. The loan-to-value ratio and interest rates will vary based on market conditions and the user's borrowing history. Coinbase says the loans are designed for users who want liquidity without triggering a taxable event by selling their crypto.
Availability and rollout
The loans are initially available to customers in certain US states, with plans to expand to more jurisdictions. Coinbase hasn't specified which states are included at launch, but the company says it's working with regulators to broaden access. The product is part of Coinbase's broader push into financial services beyond simple trading.
What this means for the market
This isn't the first time a major exchange has offered crypto-backed loans. But by using USDC — a stablecoin already pegged to the dollar — Coinbase is positioning the product as a lower-risk entry point for borrowers who want to avoid the volatility of using bitcoin or ether as collateral. The move also strengthens the utility of USDC, which is jointly issued by Circle and Coinbase.
High leverage in the futures product poses significant risk to traders. Coinbase is also launching a new equity index futures product on August 17, which could further integrate crypto markets with traditional finance.
For now, the USDC-backed loans are available to eligible US customers. Coinbase says it will continue to roll out the product to more states and potentially add more features over time.
