Coinbase rolls out UK crypto-backed loans as FCA shapes rules

Coinbase launched USDC loans for UK users backed by BTC, ETH and cbETH, expanding its borrowing product as Britain moves toward a crypto regulatory regime.

Crypto exchange Coinbase has rolled out crypto-backed USDC loans for users in the United Kingdom, allowing users to borrow USDC against Bitcoin, Ether and Coinbase Wrapped Staked Ether (cbETH). The loans are issued through Morpho, a lending protocol on Base.

According to a Monday announcement, users can borrow up to $5 million in USDC (USDC) with Bitcoin (BTC)-backed loans, depending on how much collateral a user pledges. Coinbase said interest rates are variable and set by Morpho based on market conditions on Base, suggesting that borrowing costs can change frequently.

The exchange said there is no fixed repayment schedule, but borrowers face liquidation risk if the loan-to-value ratio exceeds specific thresholds. 

The launch expands a crypto-backed lending service that Coinbase has been rolling out in the US since 2025. On Nov. 21, Coinbase launched the product across US states, except New York, allowing users to borrow up to $1 million in USDC with Ether (ETH) as their collateral. 

The expansion also comes amid ongoing regulatory developments in the UK. On Wednesday, the FCA launched a consultation for a future crypto regime expected to take effect in October 2027, covering areas like stablecoins, trading platforms, custody and staking. Until the regime comes fully into force, the UK remains only partially regulated, with rules focusing on financial promotions and Anti-Money Laundering (AML). 

The rollout adds lending to Coinbase’s growing UK product stack while extending its effort to route consumer finance activity through onchain infrastructure.

Coinbase described the UK launch as part of its effort to build a broader financial product suite in the country, following its registration with the Financial Conduct Authority (FCA) in 2025. 

On Feb. 3, 2025, Coinbase secured FCA approval as a registered crypto service provider, allowing it to offer crypto and fiat services to both retail and institutional investors. In November 2025, Coinbase launched DEX trading and savings accounts in the UK. 

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The product launch comes as Coinbase has been exploring ways to extend crypto-backed lending into traditional finance use cases.

On March 26, the exchange partnered with Better Home & Finance to allow borrowers to pledge Bitcoin or USDC as collateral for loans used to fund down payments on mortgages. 

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Source: CoinTelegraph