Coinbase Expands DeFi Offerings with Onchain USDC Loans
Coinbase has taken a significant step in promoting decentralized finance (DeFi) by introducing Onchain loans for USDC directly within its app. This move allows users to earn up to 10.8% APY, providing a more lucrative alternative to traditional lending options.
The integration with Morpho, a credit protocol based on Coinbase’s layer-2 network, enables the creation of smart contract letter bags that forward funds to Morpho vaults curated by Steakhouse Financial. These vaults distribute capital across credit markets, maximizing returns for users. The interest accrues immediately, and users can withdraw their funds at any time, provided liquidity exists.
Key Features of the Onchain USDC Loan Program
The Onchain USDC loan program offers several benefits, including:
- Returns of up to 10.8% APY
- Integration with Morpho for intelligent contractual letters through distributed credit markets
- Initial rollout in select regions, with broader access to follow in the coming weeks
This program builds upon Coinbase’s existing USDC Rewards program, which currently offers up to 4.5% APY for holding the stablecoin. By developing approved markets via Morpho, the new service provides returns more than twice as high as the rewards, while maintaining the familiar Coinbase interface.
Expansion of USDC Utility and Ecosystem
The rollout is initially available to users in the USA (excluding New York State), Bermuda, Hong Kong, the United Arab Emirates, New Zealand, the Philippines, Taiwan, and South Korea. Coinbase has announced that broader access will follow in the coming weeks. Morpho currently boasts a total value locked (TVL) of over $8 billion, highlighting the demand for decentralized loans. Through this integration, Coinbase serves as a gateway to these markets, enabling retail users to access on-chain yields without directly interacting with complex DeFi protocols.
Building a USDC Supply Ecosystem on Coinbase
Coinbase has been gradually increasing its offerings of USDC-linked services throughout 2025. The exchange started USDC loans supported by Bitcoin in January and later increased the limit to $1 million. Additionally, Coinbase has expanded USDC integrations in derivatives, NFTs, and even AI-controlled payments, creating a “flywheel” effect for the introduction. USDC remains one of the most liquid and widely-used stablecoins, with over $73 billion in circulation. The Onchain credit function of Coinbase adds another application, strengthening the bet that stablecoins will anchor the mainstream adoption of crypto finance.
For more information, visit https://crypto.news/coinbase-launches-onchain-usdc-lending-10-8-apy-2025/
