The exchange is betting that borrowers prefer certainty. Coinbase has introduced fixed-rate loans built on top of decentralized lending protocol Morpho, which lets users borrow USDC against Bitcoin with both the interest rate and the repayment date set at the outset. This move breaks with the variable-rate model that has long defined on-chain lending, where borrowing costs rise and fall with market conditions and can increase without warning.
On Tuesday, Coinbase launched its first enterprise-scale deployment of Morpho Midnight, a more recent iteration of the protocol designed for fixed rates and defined maturities. Loan pricing and execution take place natively on the cryptocurrency network itself. The company retains control over the app experience, while Morpho supplies the underlying credit infrastructure, with Coinbase’s Base network handling the settlement.
The Numbers Behind the Launch
Coinbase’s existing variable-rate loans, also powered by Morpho, now sit at over $1.4 billion in active loans backed by about $3 billion in collateral. The exchange first launched Bitcoin-backed borrowing on Base in early 2025, using Morpho as its technology provider.
A fixed-rate choice has been added to the group. Now borrowers can draw money without parting with their Bitcoin.
A Rough February for Borrowing
The launch arrives after a rough patch for Coinbase’s lending business. A sharp drop in Bitcoin and Ethereum prices back in February drove record liquidations across the exchange’s loan book, underscoring the risk that comes with borrowing against volatile collateral.
The promise of fixed rates sits uncomfortably alongside the record of what has actually happened. The exchange is now offering borrowers certainty on cost and duration, even as its own recent experience shows how rapidly collateral values can change.
What Morpho Says About the Build
Morpho positioned the pace of construction as proof that fintechs can sit sophisticated credit products on top of open infrastructure without having to rebuild the foundation beneath it.
Morpho said the protocol was built with Bitcoin at its core, though the design aims to support tokenized stocks and other real-world assets down the road.
The Shift From Variable Rates
Set repayment dates and fixed rates form the basis of traditional credit markets. Placing them on a platform of Coinbase’s scale marks a significant move for on-chain lending, which has mostly relied on variable rates up until now.
The draw for borrowers is plain to see: rather than having your rate drift along with market conditions, you can lock in what you pay instead. The exchange has presented users with a choice between two kinds of rates, a floating one and a fixed one, and that fixed option is now on offer alongside the existing variable-rate loans.
Why Coinbase Controls the Experience
The deployment’s architecture assigns Coinbase to manage the app experience via its own software, with Morpho supplying the underlying credit framework and Base taking care of settlement. That arrangement defines how the deployment is structured.
Our View on the Rollout
The February liquidations stood out as a notable occurrence, and the gap between the fixed-rate promise and what the exchange has gone through lately is plain to see.
One part of Coinbase’s operation offers a clear promise, while another operates within an environment where the value of what backs loans can shift quickly. The question of whether borrowers take up the fixed-rate option depends entirely on whether they find that promise compelling.
This deployment marks a real turning point for on-chain lending, and it is a wager that users prefer to understand their costs ahead of time rather than after the fact.
Key Facts Box
- Fixed-rate loans now available on Coinbase, powered by Morpho Midnight
- Loans allow users to borrow USDC against Bitcoin with locked rate and repayment date
- First enterprise-scale deployment of Morpho Midnight
- Existing variable-rate loans: over $1.4 billion in active loans, backed by ~$3 billion in collateral
- Bitcoin-backed borrowing first launched on Base in early 2025
- February Bitcoin and Ethereum price drop triggered record liquidations across Coinbase’s loan book
Source material: “Borrow Against Your Bitcoin at a Fixed Rate: Coinbase Expands Morpho Loans,” Decrypt.
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