Coinbase Raises Bitcoin-Backed USDC Loan Limit to $1M

Coinbase has announced an increase in its Bitcoin-backed USDC loan limit to $1 million. The crypto exchange platform introduced this update after observing $130 million in loan originations within 2025.

This development highlights Coinbase’s growth response in its crypto loan service, reflecting strong market demand and trust in such financial products.

Coinbase’s decision to increase the loan limit to $1 million USDC marks an evolution from its previous cap of $100,000. Brian Armstrong, CEO of Coinbase, remarked, “This expansion reflects the significant growth and demand we’ve experienced in crypto-backed lending.” Since early 2025, their Bitcoin-collateralized lending has gained traction, leading to over $130 million in originations.

The loan service, operating on partnerships with Morpho Labs within Coinbase’s Base Layer-2 network, offers high earning potential while retaining Bitcoin. Users benefit without needing to sell BTC, maintaining investment positions. USDC, redeemable 1:1 with USD, ensures stable value.

Technology integration played a significant role, with Morpho’s dynamic rate adjustments based on market conditions. Strategies effectively mitigate risks while enhancing user experience on the Base blockchain. Other crypto platforms observe these moves, with implications reaching beyond BTC and USDC dynamics, toward broader Layer-2 ecosystems.

Potential regulatory changes and technological advancements could see further inclusion of collateral types beyond Bitcoin. Coinbase’s alignment with U.S. regulations, excluding New York residents, signifies compliance and regulatory prudency in their operations, fostering a safer borrowing environment for users.