Coinbase Introduces Crypto-Collateralized Lending in UK Market Amid Regulatory Evolution
The cryptocurrency exchange has made USDC borrowing available to British customers using BTC, ETH and cbETH as collateral, broadening its loan offerings while the UK develops comprehensive crypto regulations.
The cryptocurrency exchange Coinbase has introduced a crypto-collateralized USDC lending service to customers in the United Kingdom, enabling borrowers to obtain USDC against collateral in the form of Bitcoin, Ether and Coinbase Wrapped Staked Ether (cbETH). The lending service is facilitated through Morpho, a decentralized lending protocol operating on Base.
Based on an announcement made on Monday, customers have the capability to borrow as much as $5 million worth of USDC when using Bitcoin-backed collateral, with the exact amount determined by the quantity of collateral provided by each user. According to Coinbase, the interest rates applied are variable in nature and determined by Morpho in response to prevailing market conditions on Base, indicating that the cost of borrowing may fluctuate with notable frequency.
The platform clarified that while no fixed repayment timeline is mandated, borrowers are exposed to liquidation risk should their loan-to-value ratio surpass certain predetermined thresholds.
This launch represents an extension of a crypto-backed lending offering that Coinbase has been progressively introducing throughout the US since 2025. On Nov. 21, Coinbase made the product available across US states, with the exception of New York, enabling customers to borrow as much as $1 million in USDC using Ether as their underlying collateral.
This expansion is also taking place against the backdrop of evolving regulatory developments within the UK. On Wednesday, the FCA initiated a consultation process for an upcoming crypto regulatory framework anticipated to become effective in October 2027, encompassing areas such as stablecoins, trading platforms, custody and staking. Prior to the regime's full implementation, the UK maintains only partial regulatory oversight, with existing rules concentrated on financial promotions and Anti-Money Laundering (AML).
This rollout incorporates lending capabilities into Coinbase's expanding UK product portfolio while furthering its strategy to channel consumer finance activity through onchain infrastructure.
UK expansion adds lending to growing product stack
Coinbase characterized the UK product launch as a component of its broader strategy to develop a more comprehensive financial product suite within the country, subsequent to obtaining registration with the Financial Conduct Authority (FCA) in 2025.
On Feb. 3, 2025, Coinbase obtained FCA approval as a registered crypto service provider, granting it authorization to provide crypto and fiat services to retail and institutional investors alike. In November 2025, Coinbase introduced DEX trading and savings accounts in the UK.
This product introduction arrives as Coinbase has been investigating opportunities to expand crypto-backed lending into traditional finance use cases.
On March 26, the exchange established a partnership with Better Home & Finance to enable borrowers to utilize Bitcoin or USDC as collateral for loans that can be applied toward funding down payments on mortgages.