Coinbase loan collateral options now include XRP, Cardano (ADA), Dogecoin (DOGE), and Litecoin (LTC), the exchange announced on Wednesday. U.S. customers can borrow up to $100,000 in USDC by posting these assets through Morpho, a decentralized finance protocol — with New York residents excluded due to local regulatory requirements. For anyone looking at an XRP collateral loan or curious how an OGEcoin collateral loan compares in structure, this kind of product is also one of the very few ways to access liquidity without triggering a sale.
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How Coinbase Loan Collateral Works for XRP, Cardano, Dogecoin & Litecoin
Borrowing Through Morpho
The way Coinbase loan collateral works is fairly straightforward. A user deposits supported crypto into a vault, draws USDC against it based on a loan-to-value ratio, and then repays the amount plus interest to reclaim the collateral. Coinbase loans Morpho infrastructure handles the on-chain side of things, keeping collateralization ratios verifiable at any point. USDC borrowing on Coinbase has already approached $2 billion in originations, according to a Dune dashboard.
Bitcoin was the first supported asset, and Ethereum was added in November 2024. XRP, Dogecoin, ADA, and LTC — the four new additions — carried a combined market cap of around $117 billion at the time of the announcement, per CoinGecko. Coinbase also reported holding $17.2 billion in XRP on its platform as of December 31, according to an SEC filing, which gives some sense of the potential demand for an XRP collateral loan product specifically.
Liquidation Risk and the Tax Question
Coinbase loan collateral products carry real liquidation risk. When a user’s collateral drops too far in value relative to what was borrowed, third parties are allowed to step in, repay the loan, and claim the collateral at a discount.
A Coinbase spokesperson told Decrypt:
“[Coinbase] enforces an additional buffer when users take out a loan to reduce liquidation risk.”
They also observed that the borrowers are notified when they reach that limit up to every 30 minutes and that the exchange is considering other means through which users can hedge their positions.
There is also a tax angle that USDC borrowers on Coinbase can easily overlook. Law firm Greenspoon Marder LLP notes that since users wrap their assets before posting them as collateral on-chain, the U.S. treats that swap as a taxable event. Liquidations can create further tax obligations on top of that. Coinbase loans Morpho users should be aware that Coinbase has stated clearly it does not provide tax advice, and that Coinbase loan collateral users are responsible for their own reporting.
Also Read: 2 Reasons XRP Hits A New Peak In 2026, And 2 Reasons It Won’t
For Dogecoin and Litecoin holders in particular, this kind of product fills a real gap. Unlike Ethereum or Cardano, neither Dogecoin nor Litecoin supports native staking, so right now a Coinbase loan collateral setup stands as one of the only productive ways holders can put those assets to work without selling them. Holders who consider an OGEcoin collateral loan model find the same appeal — borrowing against an asset rather than selling it drives the core attraction.
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