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      Coinbase Reports $2.3 Billion in Crypto-Backed Loans as Banks Embrace Tokenization

      As of October 17, 2026, Coinbase has reported $2.3 billion in outstanding crypto-backed loans, a significant milestone for the lending product that was launched in January 2025. This growth reflects the increasing interest in crypto-backed lending, particularly among U.S. users who can use Bitcoin as collateral to borrow USDC, a stablecoin pegged to the U.S. dollar, without needing to sell their Bitcoin holdings.

      The lending process utilizes Morpho, a decentralized lending protocol, operating on the Base network. By mid-September 2026, the volume of variable-rate loans had already surpassed $1.4 billion, supported by approximately $3 billion in collateral. In late September, Coinbase expanded its offerings by introducing fixed-rate loans, allowing borrowers to secure their interest costs.

      In addition to Bitcoin, Coinbase has broadened the range of collateral options available to borrowers, now including cryptocurrencies such as XRP, DOGE, ADA, and LTC. Furthermore, in August 2026, Coinbase announced a partnership with Better to enable crypto-collateralized mortgages compliant with Fannie Mae regulations.

      Meanwhile, traditional banks are also advancing in the realm of tokenization. JPMorgan has launched its JPMD tokenized deposit for institutional use on the Base network, while Citi and BNY Mellon are actively developing similar initiatives. Several banks in the United Kingdom are planning to introduce their own tokenized deposit networks by 2027, marking a significant shift towards blockchain technology in banking.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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