Coinbase Expands DeFi Push with Onchain USDC Lending
Coinbase, one of the leading cryptocurrency exchanges, is making a significant move towards decentralized finance (DeFi) with the introduction of onchain lending for USD Coin (USDC) directly within its app.
Summary:
– Coinbase unveils onchain USDC lending with yields reaching up to 10.8% APY.
– Integration with Morpho on Base allows allocation of funds across lending markets via smart contract wallets.
– The rollout begins in select regions, making DeFi more accessible without users having to leave the Coinbase app.
Coinbase recently announced the launch of an onchain lending feature for USDC, enabling users to earn yields of up to 10.8% directly through the platform. This integration, revealed on September 18, connects with the Morpho (MORPHO) lending protocol on Base, Coinbase’s Layer 2 network. When users deposit USDC, Coinbase automatically creates a smart contract wallet that channels funds into Morpho vaults managed by Steakhouse Financial.
To maximize returns, these vaults distribute capital among various lending markets. Interest begins accruing immediately, and users can withdraw their funds at any time as long as there is liquidity available.
Expanding USDC Utility:
This new feature builds upon Coinbase’s existing USDC Rewards program, offering up to 4.5% APY for holding the stablecoin. By tapping into permissionless markets through Morpho, this service provides yields that are more than double the current rewards while maintaining the user-friendly Coinbase interface.
Initially, this feature is available to users in select regions, including the U.S. (excluding New York State), Bermuda, Hong Kong, the United Arab Emirates, New Zealand, the Philippines, Taiwan, and South Korea. Coinbase plans to expand access to more regions in the near future.
Morpho currently safeguards over $8 billion in total value locked, showcasing the demand for decentralized lending. By integrating with Coinbase, retail users can access on-chain yields without the complexity of direct DeFi protocol interactions.
Building a USDC Ecosystem on Coinbase:
In 2025, Coinbase has been steadily expanding its range of USDC-linked services. It started with USDC loans backed by Bitcoin and later increased the limit to $1 million. The exchange has also integrated USDC into derivatives, NFTs, and AI-driven payments, creating a comprehensive ecosystem for adoption.
USDC remains one of the most widely used stablecoins, with a circulating supply exceeding $73 billion. Coinbase’s onchain lending feature adds another layer of utility, reinforcing its belief that stablecoins will drive mainstream adoption of crypto finance.
By introducing onchain USDC lending, Coinbase is positioning itself as a gateway to DeFi markets, making it easier for users to participate in yield-generating opportunities within the familiar confines of their Coinbase app.