[DigitalToday reporter Yoonseo Lee (이윤서)] Coinbase is introducing a USDC loan service for UK investors backed by cryptocurrencies.

Cointelegraph, a blockchain media outlet, reported on the 20th that UK users can deposit bitcoin (BTC), ether (ETH) or Coinbase Wrapped Staked ETH (cbETH) as collateral and then borrow USDC.

The loans are made through Morpho, a lending protocol based on the Base platform. If bitcoin is used as collateral, users can borrow USDC worth up to $5 million depending on the size of the collateral. The interest rate is variable, not fixed. Coinbase said it is determined by Morpho based on Base market conditions, and told users borrowing costs can change frequently.

Repayment schedules are also not fixed. Loans may be liquidated if the loan-to-value ratio exceeds a certain threshold. It is a structure that reduces maturity pressure for users, but can increase the burden of managing collateral as prices fluctuate.

The launch is a UK expansion of Coinbase's crypto-backed lending service that it has expanded in the United States since 2025. Coinbase introduced the product in each U.S. state except New York in November 2025 and at the time offered USDC loans of up to $1 million backed by ether. The UK product broadens the scope in terms of collateral assets and limits.

The expansion in the UK market also ties in with moves to refine local regulation. The Financial Conduct Authority (FCA) began a consultation process on a future crypto regulatory framework on the 16th. The new rules are expected to take effect in October 2027 and will cover stablecoins, trading platforms, custody and staking. The UK's current crypto regulation is a partial regime centred on financial promotions and anti-money laundering (AML) rules.

In this situation, Coinbase presented the UK launch as part of expanding its local suite of financial products. Coinbase said that after registering with the FCA in 2025 it became able to provide crypto and fiat services to retail and institutional investors, and in November that year it also began decentralised exchange (DEX) trading and savings account services in the UK. The company said the launch is part of efforts to build a broader range of financial products in the UK.

Coinbase is also continuing its strategy of moving consumer financial activity onto on-chain infrastructure. The company said the UK launch added lending services to its domestic product lineup. It is also running experiments to link collateral-based lending to traditional financial demand. Coinbase partnered with Better Home & Finance on March 26 and enabled bitcoin or USDC to be used as collateral for loans to fund down payments for mortgage contracts.

A partial regulatory environment is expected to continue until the UK's regulatory framework is fully implemented. As a result, Coinbase's loan product is seen as widening its business scope during a regulatory gap while also attempting to expand on-chain lending into a major consumer financial service. Still, actual users need to consider the variable-rate structure and the risk of liquidation if collateral ratios are exceeded.

The launch is significant in that Coinbase has expanded its product lineup in the UK to include lending in addition to trading and savings. As on-chain lending infrastructure and regulatory overhaul intersect, it has also highlighted the scope for expanding crypto-backed financial services.