- Coinbase is expanding its dedicated lending to XRP, ADA and DOGE holders. They can borrow up to $100,000 so they don’t have to touch their investments. Man is thus responding to the increasing need for liquidity-neutral financing.
- The loans that were previously granted to purchase BTC and ETH are now also available for other crypto assets. SThey are paid out in USDC and settled onchain via the decentralized lending protocol Morpho.
The loan is granted against the deposit of the cryptocurrency owned by the borrower as security. In return, USDC will be paid out. Lending is processed via Morpho.
Die expansion on XRP, ADA, DOGE and LTC is intended to expand the circle of potential borrowers. The Service is available throughout the United States, excluding New York State.
New options for retail investors
While Ethereum and Cardano already offer earning opportunities via native staking mechanisms, XRP, Dogecoin and Litecoin do not have comparable built-in reward models.
For many investors, crypto-backed loans are one of the few ways to obtain liquid assets without having to liquidate their positions.
Coinbase points out that borrowing against assets has tax advantages because, unlike selling, it does not trigger a capital gain that would have to be taxed as income.
At the same time, the exchange points out the risks: during strong market movements, the value of the collateral may fall below the required threshold, which leads to liquidations.
Customers receive warnings as soon as critical values are reached, but underneath there is an additional buffer zone that Coinbase has created to minimize risk.
Technical features and market positioning
A technical detail concerns the form of the collateral: the deposited assets are treated as “wrapped tokens” to make them usable on Ethereum-compatible networks.
This enables integration with Morpho and other DeFi infrastructures. Coinbase also reported that there were $17.2 billion worth of XRP holdings in customer accounts at the end of the year.
By expanding lending, Coinbase is strengthening its position in crypto-collateralized financial services and giving retail investors greater access to liquid assets without having to abandon their long-term positions.
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