Coinbase Takes a Big Step Toward Becoming the On-Chain Bank of the U.S.

When looking at the past six months together, it becomes obvious that Coinbase is building something far more ambitious: a full-scale, U.S-compliant financial stack that runs on-chain instead of on Wall Street rails.

The ETH-collateral loans went live this week for most U.S. customers (New York excluded), allowing up to $1 million in USDC to be borrowed without selling ETH holdings. The service runs on Base and is powered by Morpho, but those are details. The more important pattern is what this launch represents – another progressive step toward turning crypto assets into usable capital, not just speculative chips.

The Numbers Reveal What the Press Releases Don’t

Before this loan functionality went public, Coinbase’s on-chain lending already had size. Dune dashboard data shows more than $1.25 billion in loan originations, backed by $1.37 billion in collateral and distributed across roughly 13,500 active borrowers. The new product wasn’t created to “start” Coinbase lending – it was introduced to scale something that already works.

Morpho’s role also matters. After Coinbase integrated Morpho into its app in September and began offering up to 10.8% yields on USDC, the path for deeper lending products became obvious.

The Expansion Wave Didn’t Start With Loans

Think of Coinbase’s past few months as a domino sequence:

• acquisition of Echo for $375M (community-driven fundraising platform)
• crypto staking restored for New York residents
• partnership with Citigroup to streamline asset movement between crypto and banking
• launch of a regulated ICO platform in November – the first time U.S. retail investors got legal access to token launches since 2018

Whether these things look related on paper depends on how you think about them. Individually, they seem like different divisions shipping updates. Together, they look like the blueprint of an American crypto bank operating on public infrastructure instead of private settlement rails.

And the political environment matters too. Since the Trump administration took office and the GENIUS Act established the first clear stablecoin regulatory framework in U.S. history, Coinbase has behaved like a company finally operating with green lights instead of yellow ones.

The Next Domino Might Already Be Visible

Tech researcher Jane Manchun Wong posted screenshots this week suggesting that Coinbase is testing a prediction-market product – reportedly built with Kalshi infrastructure. If true, the company is preparing to enter yet another sector that traditional financial firms have been reluctant or unable to touch.

Look back at the loan launch now and it no longer feels like a standalone update. It looks like another step in a coordinated plan: turn Coinbase into the default U.S. gateway for crypto-native financial services — lending, staking, fundraising, payments, trading, and soon perhaps even markets that don’t exist in traditional banking.

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