Since early 2025, Coinbase has offered a feature that allows users to borrow USDC using their Bitcoin as collateral. This is done through a connection with Morpho, an onchain lending protocol. While Coinbase handles the interface, the actual funds used for these loans come from Spark.
How It Works
Users borrow directly inside the Coinbase app. Behind the scenes, Spark provides the USDC needed for the loans. Morpho handles the lending process using smart contracts. When a user borrows, Spark supplies the USDC to complete the transaction.
Repayments are made back into the system, and the whole process is recorded onchain.
Over $600 Million Deployed
By July 2025, Spark had allocated more than six hundred million dollars in USDC to support these loans. The amounts are publicly viewable through Spark’s dashboard.
A Model Others Can Use
The structure is simple: Coinbase built the interface, Morpho handles the loans, and Spark supplies the capital. Other exchanges or apps can follow the same steps. They can use Morpho to manage the loans and work with Spark to access USDC, without needing to provide their own liquidity.
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