Coinbase Unlocks XRP, DOGE, ADA and LTC for Onchain Loans Borrow Cash Without Selling Your Bags
Coinbase Expands Onchain Loans to XRP, Cardano, Dogecoin and Litecoin: What the Update Means for Crypto Investors
Coinbase has broadened access to its onchain loans product, adding several high-profile cryptocurrencies to the list of eligible collateral. The update now allows users to borrow against XRP, Cardano (ADA), Dogecoin (DOGE), and Litecoin (LTC), expanding a service that was previously limited to Bitcoin and Ethereum.
For many U.S.-based investors, the move represents a significant shift in how digital assets can be used. Rather than selling tokens to access cash, eligible customers can now borrow up to $100,000 in USDC stablecoins while retaining ownership of their crypto holdings.
The expansion reflects a broader trend in the digital asset sector: turning crypto wallets into multi-functional financial tools.
A Broader Collateral Base for Crypto Loans
Until recently, Coinbase’s onchain loans product primarily supported Bitcoin and Ethereum as collateral. Those assets continue to offer higher borrowing thresholds, but the addition of XRP, ADA, DOGE, and LTC introduces new flexibility for altcoin holders.
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Under the updated structure, users outside of restricted jurisdictions such as New York can access the service through supported Coinbase wallets. The loan process relies on smart contracts rather than traditional credit assessments.
Instead of reviewing income history or credit scores, the system evaluates the value of crypto assets deposited as collateral. Once sufficient collateral is locked into the protocol, users can receive USDC nearly instantly.
How the Onchain Loan System Works
The Coinbase onchain loans feature operates through the Morpho protocol on the Base network. This design merges decentralized finance infrastructure with Coinbase’s custodial interface, creating a hybrid approach to lending.
In practical terms, here is how the process unfolds:
A user deposits supported crypto into a smart contract.
The protocol calculates the loan-to-value ratio based on current market prices.
If the collateral meets required thresholds, USDC is issued to the borrower’s wallet.
The borrower retains ownership of the collateral, provided price levels remain above liquidation thresholds.
Because the system is onchain, loan parameters are transparent and verifiable on the blockchain.
Loan-to-Value and Liquidation Parameters
The maximum loan-to-value ratio differs depending on the asset used as collateral.
Bitcoin and Ethereum continue to offer higher leverage, with up to 75 percent LTV and significantly larger borrowing limits.
By contrast, newly supported altcoins have more conservative thresholds.
For XRP, ADA, DOGE, and LTC:
Maximum LTV is 49 percent.
Liquidation triggers occur at 62.5 percent.
Maximum borrowing amount is capped at $100,000 in USDC.
These stricter limits reflect the higher volatility typically associated with altcoins compared to Bitcoin and Ethereum.
If collateral value falls below required thresholds, liquidation mechanisms may automatically sell a portion of the crypto to repay the outstanding loan.
Key Benefits of the Coinbase Onchain Loans Expansion
Avoid Selling Long-Term Holdings
One of the primary advantages of borrowing against crypto is the ability to maintain market exposure. Investors who believe in the long-term potential of their assets can access liquidity without closing positions.
This is particularly relevant during bullish market cycles, when selling may mean forfeiting potential upside.
No Traditional Credit Checks
Unlike conventional bank loans, onchain loans are collateral-based. Approval depends solely on the mathematical relationship between deposited assets and loan size.
This structure can make the process more accessible to users who may not qualify for traditional credit products.
Fast Access to Liquidity
Once collateral is locked in the smart contract, USDC can be issued quickly. There is no lengthy underwriting process.
For investors facing urgent expenses or seeking short-term capital for other investments, this speed may be attractive.
Potential Tax Efficiency
In many jurisdictions, borrowing against crypto is not considered a taxable event, whereas selling assets may trigger capital gains taxes.
However, tax treatment varies, and users should consult qualified professionals before making decisions based on tax considerations.
A Step Toward Crypto-Backed Financial Infrastructure
Industry analysts view the Coinbase update as part of a larger movement toward integrating decentralized finance principles into mainstream crypto platforms.
By leveraging Morpho and the Base network, Coinbase blends the credibility of a regulated exchange with transparent blockchain-based lending logic.
The model differs from earlier centralized crypto lenders that operated opaque balance sheets and ultimately collapsed during market downturns. Onchain loan structures allow users to verify collateral ratios and liquidation rules directly on the blockchain.
In this sense, the update may represent a shift toward greater transparency in crypto lending markets.
Risks and Considerations
While the benefits are notable, crypto-backed loans carry significant risk.
Market Volatility
Altcoins such as XRP, ADA, DOGE, and LTC are historically more volatile than Bitcoin. Rapid price drops could trigger liquidation events if borrowers do not monitor positions closely.
Liquidation Mechanisms
Smart contracts automatically enforce liquidation thresholds. Unlike traditional loans where lenders may negotiate repayment extensions, onchain protocols execute according to code.
Borrowers must actively manage collateral ratios, especially during turbulent market conditions.
Interest and Fees
Although not as visible as liquidation risk, borrowing costs and protocol fees can affect the overall economics of the loan. Users should carefully review terms before committing assets.
Regulatory Environment
Crypto-backed lending operates in an evolving regulatory landscape. Future policy changes could impact availability or compliance requirements in certain states or regions.
The Competitive Landscape
Coinbase is not alone in offering crypto-backed loans, but its scale and user base give it a distinct advantage.
The integration of Base, its Layer 2 network, reduces transaction costs and improves settlement speed. Meanwhile, Morpho’s decentralized structure appeals to users seeking onchain transparency.
As 2026 unfolds, competition among exchanges and DeFi protocols may intensify, particularly as more altcoins are added as eligible collateral.
Some analysts anticipate that additional assets could be supported in future updates, potentially broadening borrowing limits or adjusting LTV thresholds.
Turning Crypto Wallets Into Financial Tools
The expansion of onchain loans underscores a broader ambition within the crypto industry: transforming digital wallets into multifunctional financial hubs.
Instead of merely storing tokens, users can:
Borrow against holdings
Earn yield
Trade assets
Participate in staking
Engage with decentralized applications
If managed responsibly, crypto-backed loans may become a foundational tool for portfolio management.
However, prudent risk management remains critical.
Financial Risk Disclaimer
This article is for informational purposes only and does not constitute financial advice.
Borrowing against cryptocurrency involves significant risk, including potential liquidation and capital loss. Asset prices can fluctuate rapidly, and users may lose collateral if loan thresholds are breached.
This coverage is provided by hokanews and is not affiliated with Coinbase. Readers should conduct independent research and consult financial professionals before engaging in crypto-backed lending.
Final Assessment
The expansion of Coinbase onchain loans to include XRP, Cardano, Dogecoin, and Litecoin represents a meaningful development in the evolution of crypto financial services.
By allowing eligible users to borrow up to $100,000 in USDC without selling their digital assets, the platform offers a new pathway to liquidity. The use of onchain protocols enhances transparency compared to earlier centralized lending models.
Yet the benefits come with real risk. Market volatility, liquidation mechanics, and regulatory uncertainty require careful consideration.
As the crypto industry continues to mature in 2026, onchain lending products may play an increasingly central role in how investors manage digital asset portfolios.
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