Coinbase has launched a Bitcoin-backed loan service, allowing users to borrow the USDC stablecoin without having to sell their Bitcoin. The service is available to US customers, except those in New York State, and may expand to include more collateral assets in the future. Coinbase highlighted the advantages of the offering, including delaying tax implications and seamless integration with on-chain protocols. Users can pledge Bitcoin as collateral, which is converted to Coinbase's Bitcoin wrapper and transferred to Morpho's smart contracts. Users receive USDC in return, which can be used for various purposes. Concerns have been raised about centralization risks, variable interest rates, and the potential for automatic liquidation during market downturns. Coinbase plans to expand the service globally, with the EU likely to be the next target market.



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