@Coinbase has expanded its crypto-backed lending product, allowing eligible U.S. residents outside of New York to borrow up to $100,000 in USDC by pledging their $HYPE (Hyperliquid) or $ZEC (
@Coinbase has expanded its crypto-backed lending product, allowing eligible U.S. residents outside of New York to borrow up to $100,000 in USDC by pledging their $HYPE (Hyperliquid) or $ZEC (Zcash) tokens as collateral. Loans are processed instantly through the Coinbase app.
The key appeal is the tax treatment. Borrowing against crypto holdings is not considered a taxable event, meaning users can access dollar liquidity without selling their positions and without realising a capital gain. According to Crypto Briefing, the feature lets holders of Hyperliquid and Zcash tokens borrow up to $100,000 in USDC "without triggering a taxable sale."
Risk parameters for altcoin collateral on the platform are set at a maximum loan-to-value (LTV) ratio of 49%, with liquidation triggered at 62.5%. In practical terms, that means a user posting $10,000 worth of $HYPE could borrow up to roughly $4,900. There are no fixed repayment schedules, though borrowers must keep their LTV ratio within limits to avoid automatic liquidation.
The product is powered by the @Morpho Protocol, an on-chain lending platform, running on @Base, Coinbase's own Layer-2 network. When a user posts collateral through the Coinbase app, the mechanics are handled by Morpho's smart contracts in the background. As Coinbase's own help documentation notes, "borrowing is enabled by the Morpho onchain lending protocol on Base."
The addition of $HYPE and $ZEC continues a steady expansion of accepted collateral assets. The platform already supports borrowing against Bitcoin, Ethereum, Solana, XRP, Cardano, Dogecoin, and Litecoin, with the programme having launched in early 2025. The broader Morpho and Coinbase partnership has grown considerably, with onchain collateral in their shared vaults rising 133% in 2026 to approximately $3.5 billion, alongside $1.57 billion in outstanding loans across roughly 53,000 active users.
Sources:Crypto Briefing: Coinbase expands crypto-backed loans to include HYPE and ZECCrypto Briefing: Base financing markets grow 133% this year, driven by Morpho and Coinbase integrationCoinbase Help: Crypto-backed loans introduction
