Coinbase is expanding its crypto-backed lending service to the United Kingdom, letting UK users borrow USDC using Bitcoin, Ethereum, or cbETH as collateral.

Borrowers receive up to $5 million in USDC through Morpho, a Base-based lending protocol, with dynamic rates set by Morpho based on market activity and no fixed repayment schedules.

Collateral remains locked in Morpho’s smart contracts until repayment, with liquidation penalties and triggers if loan-to-value thresholds are breached.

Users should monitor positions closely due to liquidation risk if collateral value falls.

The move highlights collateral and volatility risks in crypto-backed lending and comes amid evolving UK regulatory and market considerations.

Protocol provides on-chain liquidation mechanisms and risk dashboards to balance user convenience with prudent risk controls.

In-app monitoring shows collateral health and risk; liquidation can occur if LTV limits are exceeded, with penalties for breaches.

Coinbase app enables monitoring of collateral health, interest rate changes, liquidation alerts, and loan management features, including APR history.

Borrowers deposit collateral to receive USDC immediately, with flexible, non-fixed repayment schedules and dynamic interest rates; positions must stay within safe LTV to avoid automatic liquidation.

Key risk disclosures note that collateral is locked in Morpho contracts and that liquidation penalties may apply for LTV breaches.

Since its US launch, the product evolved from BTC-only with a $100,000 limit to a multi-asset, up-to-$5 million ceiling, signaling strong demand for on-chain liquidity without selling crypto.

Coinbase has secured a UK VASP license, enabling it to launch and operate regulated products in the region.