Coinbase expands US crypto lending to XRP, DOGE, ADA, and LTC

Coinbase has expanded its US crypto-backed lending program to include XRP, Dogecoin, Cardano, and Litecoin, widening the pool of assets customers can use to secure liquidity without selling their holdings.

Under the updated framework, eligible users outside New York can pledge the four tokens as collateral through decentralized finance protocol Morpho and borrow up to $100,000 in Circle’s USDC stablecoin, according to a Feb. 18 announcement.

The service, accessible via Coinbase’s website and mobile app, builds on an existing structure that already supports Bitcoin and Ethereum.

XRP, DOGE, ADA, and LTC carried a combined market capitalization of roughly $117 billion on Wednesday, according to CoinGecko data.

Although that figure remains well below Ethereum’s valuation, the assets maintain strong retail participation, giving Coinbase access to a sizable base of potential borrowers.

Loans are issued almost immediately once collateral is posted on-chain.

There are no fixed repayment schedules, and borrowers may repay at any time provided the position remains within risk parameters. 

Compared with Bitcoin and Ethereum, however, the newly added tokens face tighter constraints. 

While Bitcoin-backed loans can reach $5 million and Ethereum-backed loans up to $1 million, borrowing against XRP, DOGE, ADA, and LTC is capped at $100,000.

Risk thresholds are also more conservative according to Coinbase. 

The maximum loan-to-value ratio for the four tokens is set at 49%, with liquidation triggered at 62.5%. 

Interest rates vary with market conditions, and a one-time borrowing fee is added to the outstanding balance.

Proceeds cannot be used for trading on Coinbase’s platform.

How does it work?

The mechanics rely on Morpho, which operates on Base, Coinbase’s Ethereum layer-2 network.

Collateral is transferred on-chain into decentralized lending pools, while customers interact through Coinbase’s front-end interface. 

Assets used as collateral are wrapped to function within the system, a process that may carry tax implications in the US, as crypto-to-crypto conversions are generally treated as taxable events. 

Coinbase added that it does not provide tax advice and warned that liquidations could result in additional obligations if collateral values decline sharply.

Base moveaway from Optimism

The expanded product launch comes as Base, the network underpinning the product, is undergoing a structural overhaul of its own.

Base recently announced that it is transitioning away from Optimism’s OP Stack to a unified in-house technology stack as it aims to reduce its reliance on external service providers and accelerate upgrade cycles.

Base said it will consolidate core components, including the sequencer and client releases, into a single codebase.

The migration will be executed in four phases, and node operators will be required to adopt the new Base client over the coming months to remain aligned with official upgrades.