Overview
- Coinbase announced the new offering on Sep. 22, 2026, letting users borrow USDC against bitcoin with both the interest rate and loan maturity fixed when the loan is opened.
- When customers borrow, Coinbase converts pledged bitcoin into cbBTC (an ERC‑20 token it says is backed one‑for‑one) and moves that token to Morpho contracts on Base; lenders can claim the cbBTC if a borrower misses the stated maturity.
- Morpho Midnight runs fixed‑rate markets via an onchain order book where lenders post offers and borrowers pick terms; Coinbase keeps the customer interface and Base handles settlement.
- The fixed‑rate rollout is small so far — Midnight holds roughly $30 million in deposits — while Coinbase’s variable‑rate Morpho Blue still dominates with more than $1.4 billion in outstanding loans backed by about $3 billion in collateral, and onchain Coinbase collateral tied to Morpho has grown to roughly $3.62 billion with about $1.57 billion in loans across ~53,000 users.
- The change gives borrowers predictable financing costs but creates new timing risk because fixed maturities can let lenders seize cbBTC, and Morpho says Midnight could later accept tokenized stocks and other real‑world assets as collateral.