USDC loan collateral

Our team is working hard to bring Bitcoin-backed loans to all US customers (excluding NY). We're on track to making this feature available soon, and we encourage you to keep an eye out for it in your mobile app. Please check back regularly or stay tuned for updates via email.

For your crypto-backed loan, collateral refers to the asset that is held on Morpho to secure repayment of your loan. The value of your collateral relative to the outstanding amount of your loan also factors into your overall loan health. Currently, only Bitcoin (BTC) can be used. 

When you borrow, the BTC required to be pledged as collateral is converted to Coinbase Wrapped Bitcoin (cbBTC) and locked on the Morpho protocol. When you repay your loan in full (along with any accrued interest), your collateral will be returned automatically.

Add collateral (mobile app only)

  1. Access the Coinbase mobile app.

  2. From the My assets tab, go to Collateral and select your collateral balance.

  3. Select Add more and follow the prompts.

    • You can add up to $200,000 in collateral value per day depending on your account’s daily usage

Liquidation and remaining collateral

Your loan will be liquidated automatically if it reaches the liquidation loan-to-value (LLTV) threshold of 86%. When your collateral is liquidated to repay your loan and accrued interest, an additional penalty of 4.38% is included. 

Note: LTV is the ratio of your outstanding loan balance to the market value of your collateral.  If your loan accrues enough interest or the value of your collateral drops, and that causes the LTV of your loan to reach 86%, then your collateral will be liquidated to repay the loan plus the penalty fee.

To withdraw any remaining collateral after full repayment of your loan:

  1. Access the Coinbase mobile app.

  2. From the My assets tab, go to Collateral and select your collateral balance.

  3. Select Withdraw and follow the prompts.

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