Coinbase customers can borrow up to $100,000 USD in less than one minute without having to sell their Bitcoin.

Coinbase has introduced a new service that allows users to borrow currency in US dollars (US dollars), a stablecoin pegged to the dollar, using Bitcoin as collateral. This feature, available to US customers (excluding customers located in New York), is designed to provide faster and more flexible access to funds without having to sell Bitcoin (Bitcoin).

According to a note shared with crypto.news, the process works as follows: customers pledge their bitcoin as collateral, which is converted into CBTC, Wrapped version From the Bitcoin you created Coinbase. This token allows Bitcoin to operate within decentralized finance systems.

The cbBTC is then sent to Morpho, a cross-chain lending protocol built on Coinbase a base blockchain. In return, users receive USDC credits, which can be used for expenses, transferred globally, or converted into US dollars.

Unlike traditional loans, there are no fixed repayment schedules. Borrowers can repay at their own pace as long as the loan stays within a safe value range for collateral. However, if the value of Bitcoin drops significantly, liquidations may take place to ensure the loan remains covered.

Cryptocurrency lending is a bit questionable as companies like Celsius BlockFi went bankrupt in 2022, causing billions in losses and damaging confidence in cryptocurrency lending. With this news, Coinbase now acts as an intermediary for the loans it supports Morpho,DeFi protocol.

Interest on loans backed by cryptocurrencies

Cryptocurrency-backed loans offer many advantages. Borrowing against bitcoin rather than selling it allows users to defer capital gains taxes. Additionally, cross-chain lending systems operate transparently, using automated smart contracts to manage funds efficiently.

The move follows Coinbase's launch of CBBTC in September, enabling customers to interact with it Decentralized finance Applications. By combining CBTC with USDC loans, Coinbase is connecting traditional finance with decentralized instruments, making these services more accessible to users.

To get started, customers can go to the “Cash” tab in their Coinbase accounts, pledge Bitcoin, and receive USDC within seconds. Interest rates on loans adjust automatically based on market activity on the underlying blockchain. This launch represents another step towards making DeFi more user-friendly.