Coinbase has significantly expanded its on-chain lending service, now allowing U.S. customers to use XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC) as collateral for loans. This strategic move, announced in early 2025 and now live, enables qualified users to borrow up to $100,000 in USDC stablecoin without selling their underlying crypto assets, thereby avoiding a potential taxable event.
The service is designed for speed, offering "instant" liquidity. It is powered by the decentralized finance (DeFi) infrastructure protocol Morpho and runs on Base, Coinbase's own Layer-2 network. This integration highlights a growing trend of centralized exchanges (CEX) leveraging DeFi protocols to enhance user utility. The service is available immediately to customers across the United States, with the notable exception of New York state due to its specific regulatory requirements.
Coinbase has outlined associated risks, including variable interest rates that can change with market conditions and the risk of collateral liquidation. If the value of the pledged assets drops significantly, users may need to add more funds or risk having their assets sold to cover the loan.
Analysts view this expansion as a major step toward mainstream financial integration for these altcoins, providing tangible utility beyond speculation. It allows holders to access capital for expenses or other investments while maintaining their long-term market position. The selection of XRP, DOGE, ADA, and LTC is based on their substantial market capitalization, high liquidity, and dedicated user bases.
