TL;DR
Coinbase offers UK loans up to $5 million in USDC.
Borrowers use Bitcoin, Ether, or cbETH as collateral.
Morpho sets variable rates; liquidation risk applies if overcollateralized.
Coinbase launched crypto-backed loans for United Kingdom residents on Monday. Users can borrow USDC against three assets: Bitcoin, Ethereum, and Coinbase Wrapped Staked Ether (cbETH). The exchange uses Morpho, a lending protocol built on Base, to process the loans. A borrower can get up to $5 million in USDC, depending on how much collateral they put down. Interest rates change over time because Morpho adjusts them according to market conditions on Base.
There is no fixed repayment schedule. But Coinbase warns that borrowers face liquidation if the loan-to-value ratio goes above certain limits. In plain terms, if the value of the collateral drops too much, the system sells it to cover the debt.
The UK launch expands a service that Coinbase first rolled out in the United States in 2025. Last November, the exchange allowed US users (except New York) to borrow up to $1 million in USDC using Ether as collateral.
UK regulatory timeline and Coinbase’s growing product set
The move arrives as British regulators prepare a new crypto regime. On Wednesday, the Financial Conduct Authority (FCA) opened a consultation for rules expected to take effect in October 2027. Those rules will cover stablecoins, trading platforms, custody, and staking. Until then, the UK remains partly regulated. Current rules focus on financial promotions and anti-money laundering (AML) requirements.
Coinbase secured FCA registration as a crypto service provider on February 3, 2025. That approval allows the exchange to offer crypto and fiat services to retail and institutional investors. In November 2025, Coinbase added decentralized exchange (DEX) trading and savings accounts for UK users.
The exchange now adds lending to its UK product stack
Coinbase describes the move as part of a broader effort to route consumer finance through on-chain infrastructure. One recent example: on March 26, Coinbase partnered with Better Home & Finance. That deal lets borrowers pledge Bitcoin or USDC as collateral for loans that cover down payments on mortgages.
For UK users, the new USDC loans offer a way to get liquidity without selling their crypto. But the variable interest rate and liquidation risk require attention. A sudden price drop in Bitcoin or Ethereum could trigger an automatic sale of the collateral. That leaves the borrower with no assets and a closed loan. Coinbase does not provide a fixed repayment calendar. Borrowers must monitor their positions manually or use tools to track the loan-to-value ratio.
The FCA’s upcoming regime may bring clearer rules for such products. Until 2027, the exchange operates under the existing registration and promotion rules. Coinbase appears willing to move ahead regardless, adding lending to a list that already includes trading, savings, and DEX access. Whether UK users embrace these loans depends on how they balance the need for cash against the risk of losing their Bitcoin or Ethereum.
