Coinbase has expanded its crypto-backed lending product to include four major altcoins: XRP, Dogecoin, Cardano, and Litecoin. U.S. customers, excluding those in New York, can now use these assets as collateral to borrow up to $100,000 in USDC stablecoin via the decentralized finance protocol Morpho. This move comes as the product nears $2 billion in originations but follows a recent wave of loan liquidations during market volatility.
Coinbase announced the expansion of its crypto-backed lending service to support XRP, Dogecoin, Cardano, and Litecoin. According to the exchange’s statement on X, U.S. customers can borrow up to $100,000 in USDC by posting these assets as collateral on the Morpho protocol. The product is now available across most of the United States, excluding the state of New York.
The service is approaching $2 billion in originations, according to a Dune dashboard. It initially accepted Bitcoin over a year ago before adding Ethereum support in November.
XRP, Dogecoin, Cardano, and Litecoin had a combined market value of $117 billion on the day of the announcement. For assets like XRP, Dogecoin, and Litecoin, which lack native staking, this lending service offers one of the few ways to generate liquidity without selling holdings.
Coinbase reported holding $17.2 billion in XRP on its platform as of December 31 in a recent SEC filing. The exchange has positioned the product as a way for customers to grow their wealth by leveraging decentralized finance capabilities.
Crypto-backed loans allow access to liquidity from appreciated assets without triggering immediate capital gains taxes. However, liquidations can create tax obligations, and swapping crypto for its wrapped version for use as collateral is itself a taxable event in the U.S.
Loan liquidations occur on Morpho when collateral value falls too much relative to the borrowed amount. Coinbase noted on X that its loans face liquidation risk and that it does not provide tax advice.
During a wave of liquidations on February 6, a company spokesperson stated that Coinbase “enforces an additional buffer when users take out a loan to reduce liquidation risk.” The exchange also notifies borrowers as the liquidation threshold is approached, up to every 30 minutes.
Around that time, approximately $170 million worth of crypto-backed loans were liquidated over a seven-day period. The spokesperson added that the exchange is exploring additional ways for users to protect their loans.
