• Coinbase now lets users borrow up to $100,000 in USDC using XRP ADA LTC and DOGE as collateral.
• The platform applies a 49% loan to value cap and starts liquidation at 62.5%.
• Coinbase has issued over $1.9 billion in crypto backed loans showing steady demand.

Coinbase has expanded its crypto-backed loan program to include XRP, Cardano, Litecoin, and Dogecoin. Eligible U.S. users can now borrow against these assets. However, the service does not cover residents in New York. Users can access up to $100,000 in USDC without selling their tokens. This move increases the number of assets customers can use as collateral.

Previously, Coinbase allowed only Bitcoin and Ethereum as loan collateral. Bitcoin holders can borrow up to $5 million. Ethereum holders can borrow up to $1 million. Now, holders of four major altcoins can also unlock liquidity. As a result, more investors can access cash while keeping their long-term positions.

Users manage the service through Coinbase’s website and mobile app. The system transfers pledged assets on-chain. At the same time, the platform provides a simple borrowing interface. Borrowers receive USDC quickly after locking their crypto. They can repay the loan at any time if they maintain required collateral levels. Coinbase recently expanded its prediction markets feature to users across all 50 U.S. states.

Borrowing Limits and Risk Controls

Coinbase applies tighter controls to XRP, ADA, LTC, and DOGE loans. Each of these assets carries a borrowing cap of $100,000. In contrast, Bitcoin and Ethereum offer higher limits. This structure reflects the price volatility of the added tokens.

The company sets a maximum loan-to-value ratio of 49% for the four altcoins. It initiates liquidation once the ratio reaches 62.5%. Therefore, users must monitor price movements closely. Interest rates change based on market conditions. Additionally, Coinbase adds a one-time borrowing fee to each loan.

Borrowers cannot use loaned USDC for trading on Coinbase. Instead, they can use the funds for expenses or other needs. Many investors prefer this option because it helps them avoid selling assets. However, falling prices can quickly weaken collateral positions. Users risk losing pledged assets if values drop sharply.

On-Chain Infrastructure and Market Demand

Morpho powers the lending service and operates on Base, Coinbase’s layer-two network. The system moves collateral into decentralized lending pools. Meanwhile, Coinbase manages the customer-facing experience. This setup allows on-chain management with centralized access. Earlier last year, Coinbase expanded its DeFi ecosystem by launching wrapped versions of XRP and Dogecoin on its Base network.

Crypto-backed loans have attracted steady interest from investors. Many users want liquidity without triggering taxable sales. XRP, ADA, LTC, and DOGE hold a combined market value of roughly $120 billion. Consequently, Coinbase now reaches a wider base of potential borrowers.

Market Reaction and Ongoing Risks

Before this update, the platform originated more than $1.9 billion in loans. That figure shows consistent demand for the product. Following the announcement, XRP increased slightly, whereas ADA, DOGE, and Litecoin decreased slightly. Nonetheless, Coinbase still enlarges its lending service amidst the increasing competition on both centralized and decentralized platforms.