Coinbase rolls out borrowing of up to $1 million using staked ether as collateral

Coinbase has launched a new borrowing feature that lets U.S. users access up to $1 million in liquidity by using cbETH — its tokenized version of staked ether — as collateral. The move allows investors to raise cash without selling or unstaking their ETH.

The feature is available now to eligible U.S. customers, excluding New York, and enables users to borrow USDC against cbETH held on Coinbase, which can then be converted to dollars directly on the platform.

The rollout highlights growing demand for ways to unlock liquidity from staked assets, as ether staking increasingly becomes a long-term investment strategy rather than a short-term yield play.

Loans are facilitated through Morpho, an onchain lending protocol that supports overcollateralized borrowing via smart contracts. Interest rates are variable and market-driven, and borrowers can repay at any time, with no fixed schedule or maturity date.

Collateral management remains the key risk. Coinbase has noted that borrowers must maintain a loan-to-value ratio below 86% to avoid automatic liquidation and penalties — a threshold that could be tested in volatile market conditions, given ether’s price swings.

By allowing cbETH as collateral, Coinbase is effectively expanding the use case of staked ether. Users can retain exposure to ETH price movements and staking rewards while accessing liquidity for portfolio rebalancing, major purchases, or other cash needs.

The launch comes amid growing competition among centralized exchanges and DeFi protocols to offer capital-efficient borrowing products tied to staked assets. Tokenized staking derivatives like cbETH have steadily grown in popularity, especially among investors looking to avoid the opportunity cost of locked capital.

Coinbase said the feature is now live for U.S. users outside New York and is part of a broader effort to give crypto holders more flexibility without forcing sales during volatile market periods.