Coinbase fixed-rate BTC loans expose collateral after maturity

Coinbase launched a fixed-rate, Bitcoin-backed USDC loan product on Sept. 22, 2026, using the Morpho Midnight protocol. Each loan sets a final interest rate and a single repayment date when a borrower accepts the offer. If the borrower does not repay the full balance by that maturity, the loan becomes eligible for post-maturity liquidation.

Before confirmation, borrowers see an indicative rate; the final fixed rate is applied at acceptance. Early repayment does not reduce the interest owed. Coinbase continues to offer variable-rate loans alongside the fixed product; variable loans have no set due date and are not subject to the post-maturity liquidation mechanism.

Morpho’s rules create two separate liquidation triggers. A position can be liquidated before maturity if falling collateral value or rising debt pushes the loan past the protocol’s health threshold. Separately, if a fixed-rate loan remains unpaid after its stated maturity, a third party may repay the outstanding debt and claim the collateral even when the position’s loan-to-value ratio remains within healthy limits. At the exact moment of maturity a healthy position is not automatically liquidated; collateral remains until a liquidator executes the required transaction after the deadline.

Coinbase will send borrowers reminders seven days, three days and 24 hours before a fixed-rate loan comes due. The product is available to verified U.S. customers outside New York, with limited access in the U.K. For the fixed-rate launch, Morpho specifies bitcoin as the required collateral; Coinbase says collateral options may differ between fixed and variable loans. Available rates and borrowing limits appear in the product at the time of application, and existing loans cannot be converted between fixed and variable terms.