Coinbase offers cryptocurrency-backed loans to XRP, ADA, Dogecoin, and Litecoin holders
February 20, 2026
Coinbase has extended its crypto lending service to include XRP, ADA, DOGE, and LTC holders in the United States, offering them the ability to borrow USDC without having to sell their cryptocurrency assets. This new feature allows eligible users to borrow up to $100,000 USDC by leveraging their crypto holdings as collateral.
The borrowing process involves locking the tokens as collateral and receiving USDC in exchange, rather than liquidating the crypto assets. These loans are executed on Morpho, a decentralized lending protocol, through blockchain smart contracts, ensuring transparency and security without relying on Coinbase’s internal balance sheet for processing.
While Coinbase’s lending service previously only supported Bitcoin and Ethereum, the inclusion of XRP, DOGE, and ADA tokens makes the platform more retail-oriented. This expansion allows users of assets beyond Ethereum and Cardano, which already offer staking rewards, to borrow against their holdings, providing an avenue for generating liquidity without selling their crypto. As of December 31, Coinbase reported holding $17.2 billion worth of XRP in customer accounts.
Although borrowing against crypto assets can offer tax efficiency benefits, selling these assets may trigger capital gains taxes and pose risks. In the event of a significant drop in the cryptocurrency’s value, the loan can be liquidated, potentially resulting in the borrower losing some of their crypto holdings at a discounted rate. To mitigate these risks, Coinbase has implemented safety measures such as adding a buffer to reduce the likelihood of liquidations and issuing warnings when a borrower’s position approaches risky levels.
Coinbase also notes that certain assets may need to be converted into wrapped tokens to facilitate lending within Ethereum-compatible networks, potentially carrying tax implications depending on local regulations. By expanding its borrowing options, Coinbase is positioning itself as a comprehensive crypto financial services platform, providing a broader range of services to its users.
In summary, Coinbase’s decision to include XRP, ADA, DOGE, and LTC tokens in its lending service underscores its commitment to offering diverse financial solutions to cryptocurrency investors, allowing them to leverage their holdings without compromising their long-term positions. This development signals Coinbase’s efforts to cater to a wider range of crypto investors and provide innovative financial tools within the expanding digital asset landscape.
