Coinbase Shatters Ceiling with Onchain USDC Lending Offering Stellar 10.8% APY

Coinbase just dropped a bombshell in the DeFi space—onchain USDC lending that actually delivers double-digit yields. No more settling for pathetic traditional savings rates when you can earn real returns on your stablecoins.

How It Works

The platform connects lenders directly with institutional borrowers through smart contracts, cutting out traditional banking middlemen. Your USDC isn't just sitting idle—it's working harder than most portfolio managers.

Why This Changes Everything

Forget begging your bank for 0.5% APY while they lend your money out at 10%. Coinbase's move proves regulated exchanges can compete with DeFi protocols on yield—without the unsecured risk that keeps compliance officers awake at night.

Wall Street's worst nightmare? A financial system that actually pays fair interest rates.

Expanding USDC utility

The rollout builds on Coinbase’s existing USDC Rewards program, which currently offers up to 4.5% APY for holding the stablecoin. By tapping into permissionless markets via Morpho, the new service provides yields more than double those rewards while keeping the familiar Coinbase interface.

The feature is initially available to users in the U.S. (excluding New York State), Bermuda, Hong Kong, the United Arab Emirates, New Zealand, the Philippines, Taiwan, and South Korea. Coinbase said broader access will follow in the coming weeks.

Morpho currently secures more than $8 billion in total value locked, highlighting demand for decentralized lending. Through this integration, Coinbase will serve as a gateway to these markets, enabling retail users to access on-chain yields without having to deal directly with complex DeFi protocols.

Building a USDC utility ecosystem on Coinbase

In 2025, Coinbase has gradually increased the range of USDC-linked services it offers. It launched USDC loans backed by Bitcoin in January, later increasing the limit to $1 million. The exchange has also expanded USDC integrations into derivatives, NFTs, and even AI-driven payments, creating what it describes as a “flywheel” effect for adoption.

USDC is still one of the most liquid and extensively used stablecoins, with over $73 billion in circulation. Coinbase’s onchain lending feature adds another use case, strengthening its bet that stablecoins will anchor mainstream adoption of crypto finance.