Coinbase has unveiled a new borrowing feature that allows U.S. users to tap up to $1 million in liquidity by using cbETH — its tokenized form of staked ether — as collateral. The move enables investors to raise cash without selling or unstaking their ETH.
The feature is available immediately to eligible U.S. customers, excluding New York, letting users borrow USDC against cbETH held on Coinbase and convert it into dollars within the platform.
The launch reflects growing demand for liquidity solutions tied to staked assets, as ether staking increasingly shifts from short-term yield strategies to long-term holdings.
Loans are powered by Morpho, an onchain lending protocol that supports overcollateralized borrowing via smart contracts. Interest rates are variable and market-driven, and borrowers can repay at any time, with no fixed schedule or maturity.
Collateral management remains the main risk. Coinbase has noted that borrowers must maintain a loan-to-value ratio below 86% to avoid automatic liquidation, a threshold that could be tested during periods of sharp price swings in ether.
By allowing cbETH as collateral, Coinbase is extending the utility of staked ether beyond passive yield. Users can maintain exposure to ETH price movements and staking rewards while unlocking liquidity for portfolio rebalancing, major purchases, or other expenses.
The rollout comes as competition grows among exchanges and DeFi platforms to offer capital-efficient borrowing products linked to staked assets. Tokenized derivatives like cbETH have steadily gained traction among investors looking to reduce the opportunity cost of locked capital.
Coinbase said the feature is now live in the U.S., excluding New York, as part of a broader effort to make crypto holdings more flexible without forcing sales during volatile market conditions.
