Coinbase is expanding its U.S. crypto-backed lending service to include XRP, dogecoin, Cardano’s ADA and litecoin, allowing more customers to borrow against their holdings without selling. The loans, capped at $100,000 in USDC and routed on-chain through the Morpho protocol, are available nationwide except in New York and use wrapped versions of some tokens as collateral.
While marketed as a tax-efficient way to access liquidity, the product carries liquidation risk if collateral values drop and may trigger taxable events when assets are converted into wrapped tokens. Coinbase applies an extra buffer when users take out a loan to reduce liquidation risk and sends notifications as the threshold is approached. Collateral used through the product is wrapped, a process that allows tokens like XRP to exist on Ethereum-compatible networks.
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