Unlock the Power of Your Bitcoin: Coinbase Launches Instant Loans for U.S. Users

Coinbase Introduces Bitcoin-Backed Loans

Crypto exchange Coinbase has launched a groundbreaking service that allows U.S. customers (excluding those in New York) to borrow USDC against their Bitcoin holdings. This new offering enables users to access liquidity without needing to sell their Bitcoin, offering instant loans with flexible repayment terms and competitive interest rates.

How It Works

Loans are disbursed instantly in USDC, with repayment options that are flexible and interest rates that are set dynamically by Morpho, an open-source lending protocol on Coinbase’s Layer-2 blockchain Base.

“Getting a Bitcoin-backed loan on Coinbase is now easier and faster than ever. In under a minute, you can get a loan in USDC without ever having to sell your Bitcoin,” the company stated.

Key Features

• When users borrow USDC against their Bitcoin, the collateral is automatically converted to Coinbase Wrapped Bitcoin (cbBTC) on a 1:1 basis and transferred to the Morpho protocol.
• Users can borrow up to $100,000 USDC, depending on the amount of Bitcoin pledged as collateral.
• Interest rates are variable and adjusted in real-time by Morpho based on market conditions.
• There is no fixed repayment schedule, allowing users to monitor their loan status through the Coinbase app.
• Users face liquidation if the loan amount, including accrued interest, reaches a predetermined level compared to their collateral value.

Benefits of Borrowing vs. Selling

Coinbase emphasizes the advantages of borrowing against Bitcoin rather than selling it, including potential tax benefits by delaying capital gains or losses. This launch is part of Coinbase’s mission to empower customers with “greater control over their financial lives.” By merging the accessibility of Coinbase with the transparency of on-chain protocols, the company aims to provide vastly improved financial services.

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