Coinbase Expands Crypto-Backed Loans to XRP, Dogecoin, Cardano, and Litecoin Holders in the U.S.
In a significant broadening of its lending services, Coinbase has announced that holders of several popular cryptocurrencies including XRP, Dogecoin (DOGE), Cardano’s ADA, and Litecoin (LTC) can now borrow up to $100,000 in U.S. dollars without having to sell their tokens. This move, unveiled on February 19, 2026, enhances access to the platform’s Morpho-powered lending product and offers retail investors a way to unlock liquidity while holding on to their digital assets.
Widening Access to Crypto Collateral
Previously, Coinbase’s crypto-backed lending product was primarily available to holders of Bitcoin (BTC) and Ethereum (ETH). The expansion to include XRP, DOGE, ADA, and LTC marks an increased focus on retail-heavy tokens that do not offer native staking rewards or yield mechanisms. This provides a new avenue for holders of these assets to leverage their crypto positions without liquidating them, thereby retaining potential long-term gains.
Users can borrow up to $100,000 in Circle’s USDC stablecoin by posting their crypto holdings as collateral. The lending service is available across the United States, with the exception of New York, due to regulatory constraints. Importantly, the loans are routed on-chain through Morpho, a decentralized lending protocol, which means borrowing activities occur on the blockchain rather than through Coinbase’s own balance sheet.
Collateral and Risks
To participate, customers use wrapped versions of some tokens — a process that allows assets like XRP to function within Ethereum-compatible networks. While this enables broader lending capabilities, Coinbase has cautioned users that wrapping and converting assets into these compatible versions may trigger taxable events and could present additional risks.
The company stresses that the service is intended as a tax-efficient liquidity solution since borrowing against crypto assets generally does not trigger capital gains taxes in the same way selling does. However, there is an inherent liquidation risk: if the value of the posted collateral falls significantly relative to the loan balance, Coinbase (or associated third parties) can liquidate the collateral to repay the debt, potentially at a disadvantageous rate for the borrower.
Coinbase has implemented protective buffers to minimize liquidation risks and sends notifications to borrowers as collateral values approach critical levels. Nonetheless, the volatile nature of cryptocurrency markets means users should carefully consider the risks involved.
Market Context and Customer Base
According to an SEC filing, Coinbase held $17.2 billion worth of XRP as of December 31, 2025, signifying the token’s substantial presence within the exchange’s customer portfolios. The expansion of lending services to include XRP and other retail-centric tokens aligns with the growing demand from investors seeking more flexible financial products in the crypto ecosystem.
By allowing borrowing against a wider range of crypto assets, Coinbase’s latest move underscores the company’s ongoing effort to innovate within the crypto lending sector, particularly by integrating decentralized protocols like Morpho to handle loan mechanics transparently and securely on-chain.
Summary
- Coinbase now allows U.S.-based holders of XRP, Dogecoin, Cardano ADA, and Litecoin to borrow up to $100,000 in USDC stablecoins.
- Loans are facilitated via Morpho, a decentralized protocol, with collateral consisting of wrapped tokens on Ethereum-compatible networks.
- The product is available nationwide except for New York.
- Borrowing against crypto holdings offers a tax-efficient way to access liquidity without selling but carries liquidation risks if collateral value declines.
- Coinbase provides safeguards like buffers and notifications to reduce the risk of forced liquidations.
This expansion adds further options for crypto investors to leverage their portfolios in a regulated and accessible manner, reflecting the maturation and diversification of financial products in the digital asset space.