Coinbase Introduces Staked Ethereum Loans, Allowing Users to Borrow Up to $1 Million

TheNewsCryptoPublished on 2026-01-23Last updated on 2026-01-23

Abstract

Coinbase has introduced a new staked Ethereum loan service for eligible U.S. users, enabling them to borrow up to $1 million in USDC using cbETH—a token representing their staked ETH—as collateral. This allows borrowers to retain staking rewards and maintain exposure to ETH's price movements while accessing liquidity. Loans are overcollateralized, with interest rates based on market conditions and no fixed repayment date. However, borrowers must keep the loan-to-value ratio below 86% to avoid automatic liquidation in case of sharp ETH price drops. The feature, powered by Morpho, offers long-term stakers greater flexibility without needing to unstake or sell their ETH.

Coinbase has launched a new borrowing feature which allows the eligible U.S. users to borrow upto $1 million in USDC without selling or unstaking their ETH. The users can use the new product, cbETH, which is Coinbase’s token that represents the staked ETH as collateral to borrow USDC. This makes users continue earning staking rewards and maintain exposure to ETH’s price movement.

How Coinbase’s cbETH Borrowing Works

The users who hold the cbETH can deposit it as collateral on the coinbase and can borrow USDC against it. The borrowed USDC can be converted into U.S. dollars directly inside Coinbase. Depending on the collateral, the loans can go upto $1 million. The Loans are Overcollateralized which means the users must deposit more value than they borrow, with the interest changing based on the market conditions. Borrowers can repay part or the full amount of the loan at any time without a fixed repayment date. This lending system is powered by Morpho, an on-chain lending protocol.

Coinbase warns users to keep their loan-to-value below 86%. If the ETH price falls sharply, then the automatic liquidations will happen, and the borrowers should face the penalties. Because ETH is more volatile, borrowers must carefully manage the risks.

Staking ETH usually locks the funds for a long period. By allowing the cbETH to be used as collateral, users can keep their Ether exposure and access liquidity without selling during market downturns. This makes the staked Ether more flexible and useful for the long-term holders.

This launch shows how the crypto platforms are evolving beyond simple buying and selling. Tokenized staking products like cbETH are becoming more popular as investors are looking for ways to avoid locking their capital while still earning yield.

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