Crypto exchange Coinbase has expanded its U.S. lending program, now allowing holders of XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC) to borrow up to $100,000 in USDC without selling their crypto.
The move broadens Coinbase’s crypto-backed loan offering beyond Bitcoin and Ether, targeting some of the most widely held retail altcoins in the U.S.
Coinbase’s expanded lending feature allows users to unlock liquidity by pledging eligible crypto assets as collateral instead of selling them outright. In return, borrowers receive Circle’s USDC stablecoin, with the entire lending process executed on-chain through the Morpho protocol. This means the loan mechanics operate via blockchain infrastructure rather than directly through Coinbase’s corporate balance sheet.
Customers can borrow up to $100,000 in USDC, and the service is available across the United States, with the exception of New York due to regulatory restrictions. To facilitate compatibility with the lending infrastructure, certain supported assets are converted into wrapped versions, allowing them to function seamlessly within Ethereum-compatible environments.
The structure is designed to provide near-instant access to capital while preserving long-term market exposure. Instead of triggering a taxable sale or exiting a position during market weakness, investors can maintain ownership of their assets while using them as collateral to access stablecoin liquidity. However, like all collateralized lending products, the model depends on market stability, sharp price swings could impact collateral values and loan health.
The inclusion of XRP, DOGE, ADA and LTC signals Coinbase’s push into high-retail-demand tokens. Unlike ETH and ADA (which offer staking rewards), tokens like XRP, DOGE and LTC do not provide built-in yield mechanisms.
For many holders, borrowing against their crypto may be one of the only ways to unlock liquidity without exiting positions particularly during uncertain market conditions.
Coinbase previously reported holding $17.2 billion in XRP on behalf of customers, highlighting the scale of assets potentially eligible for collateralization.
Although crypto-backed loans are often promoted as a tax-efficient way to access liquidity, since borrowing against an asset does not usually trigger capital gains like selling would, the structure is not without meaningful risks. The primary concern lies in market volatility. If the value of the pledged collateral declines significantly, the loan can approach its liquidation threshold.
In such cases, the position may be automatically liquidated. This means a third party can step in to repay the outstanding debt and, in exchange, seize the collateral, often at a discount. During periods of sharp market downturns, rapid price swings can accelerate this process, leaving borrowers little time to react.
There are also potential tax considerations tied to the mechanics of the product. Because some assets are converted into wrapped versions to function within the lending infrastructure, that conversion could, in certain jurisdictions, be treated as a taxable event depending on how regulators classify the transaction.
Coinbase states that it builds in additional collateral buffers to reduce the likelihood of sudden liquidations and provides notifications as positions approach risk levels. However, in fast-moving markets, volatility remains the biggest threat. Borrowers must closely monitor collateral ratios, as leverage, even when structured as a loan, can amplify downside risk just as quickly as it provides liquidity.
The expansion arrives as Bitcoin trades near $67,000 following hawkish Fed signals, with broader crypto markets in cautious mode. Altcoins have seen increased volatility, and liquidity remains thin.
Coinbase is betting that demand for liquidity, not just trading will drive the next phase of exchange revenue. For investors, the product offers flexibility, but in a volatile market, leverage always comes with risk.
