Coinbase Launches Fixed-Rate Bitcoin-Backed Loans Through Morpho’s Midnight

Coinbase has launched a service that lets users take out fixed-rate loans backed by Bitcoin.

The Block reported on September 22 that Coinbase added a USDC loan product integrated with Midnight, the fixed-rate offering from decentralized lending protocol Morpho. The service allows users to lock in both the interest rate and the repayment date when the loan is originated.

Coinbase’s existing floating-rate loans operate on the Morpho Blue protocol. The company said outstanding balances in that service have exceeded $1.4 billion, with collateral totaling about $3 billion.

Morpho launched Midnight on the Base network in July. The product is notable for introducing fixed rates and set maturities to an on-chain lending market that has generally offered only floating rates. A Morpho spokesperson told The Block that Coinbase is the first major consumer platform to offer Midnight at scale. Midnight currently holds about $30 million in deposits.

Coinbase is currently offering two loan products, one maturing at the end of September and the other at the end of October. Repayment is required by maturity, and if a borrower fails to repay, the lender has a claim on the collateral. Rates are determined on an on-chain order book based on supply and demand from lenders and borrowers.

Jacob Frantz, Coinbase’s head of earnings and investment products, said Coinbase Borrow allows users to access liquidity without selling their assets and that fixed-rate loans expand the range of choices available for managing credit.

Under the structure, Coinbase handles the app experience, Morpho provides the lending protocol, and transactions are processed on the Base network. Morpho is also considering an expansion into structured credit products using Midnight and loans backed by tokenized real-world assets.