• Coinbase now allows users to borrow USD Coin using Ethereum as collateral.
• The Bitcoin loan limit has been increased to $5 million, while ETH-backed loans are capped at $1 million.
• Crypto-backed loans are available to all U.S. customers, excluding New York residents.

Coinbase (COIN) announced Thursday that users can now use their Ethereum (ETH) holdings as collateral to borrow Circle’s (CRCL) stablecoin, USD Coin (USDC). 

The platform already supports Bitcoin (BTC)-backed loans, which now allow borrowing up to $5 million in USDC. Ethereum-backed loans are capped at $1 million. The service is available to U.S. customers, excluding New York, with plans to expand to additional assets and countries.

COIN’s stock edged 0.7% lower in morning trade, even though the broader market was recovering from a week of volatile trading. On Stocktwits, retail sentiment around the crypto exchange remained in ‘neutral’ territory with chatter at ‘high’ levels. 

The loans are powered by Morpho and run on Base, which also powers Coinbase’s Bitcoin-backed loans. Base by Coinbase is a secure, low-cost, developer-friendly Ethereum Layer 2 (L2) blockchain network.

Last month, Coinbase surpassed $1 billion in Bitcoin-backed on-chain loan originations, just eight months after launching the service in January. “Next goal: $100B in onchain borrow originations,” Coinbase CEO Brian Armstrong posted on X at the time. “These adoption charts are what every product manager wants to see: hockey stick growth. The onchain economy is thriving.”

Coinbase is positioning crypto-backed lending as an alternative for users to access liquidity without selling assets.

Get updates to this developing story directly on Stocktwits.

Read also: BTC Price Rebounds After ETF Flows Turn Positive – Solana Outperforms While Binance Coin, Ethereum Slide

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