Coinbase’s Crypto-Backed Lending Product Expands to XRP and DOGE
Coinbase expanded its U.S. crypto-backed lending product by adding support for XRP, Dogecoin, Cardano, and Litecoin as collateral, allowing users to borrow up to $100,000 in USDC via the Morpho decentralized finance protocol. The service is available nationwide except for New York. Previously, the product accepted Ethereum and Bitcoin. Combined, the new supported assets have a market cap of $117 billion, and their inclusion aims to broaden the product’s appeal, particularly among retail investors. Unlike Ethereum and Cardano, which can be staked, XRP, Dogecoin, and Litecoin cannot, making crypto-backed lending a key method for holders to access liquidity without selling. Coinbase holds significant amounts of these assets and positions the product as helping users unlock liquidity and grow wealth. Loans do not trigger capital gains taxes unless collateral is liquidated or wrapped, which may be taxable events. Liquidation occurs if the value of collateral drops too far, with Coinbase enforcing risk buffers and frequent notifications to borrowers. The exchange is also exploring further ways to protect users from liquidation risks.
