Coinbase has expanded its crypto lending service across the United States, excluding New York. The platform now enables holders of XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC) to borrow USD Coin (USDC) by using their cryptocurrency as collateral, up to a limit of $100,000.
This service operates on the decentralized lending protocol Morpho, utilizing blockchain smart contracts for loan processing. Previously, Coinbase's lending service supported only Bitcoin and Ethereum. The inclusion of these retail-focused tokens offers a new avenue for liquidity without requiring users to sell their digital assets.
Coinbase has issued a warning regarding the risks associated with this lending service. While borrowing against crypto can be tax-efficient, significant price drops in the collateral could lead to liquidation. The company states it incorporates a safety buffer and provides warnings as positions approach danger levels to mitigate liquidation risks.