Coinbase lets users borrow up to $1 million against staked ether without selling

Coinbase has launched a new borrowing feature that allows users to access up to $1 million in liquidity using cbETH — its tokenized representation of staked ether — as collateral, giving investors a way to raise cash without selling or unstaking their ETH.

The product, now available to eligible U.S. customers excluding New York, lets users borrow USDC against cbETH held on the platform and convert it to dollars inside Coinbase.

The move suggests growing demand for ways to unlock liquidity from staked assets as ether staking becomes a longer-term holding strategy rather than a short-term yield trade.

Loans are powered by Morpho, an onchain lending protocol that facilitates overcollateralized borrowing using smart contracts. Interest rates are variable and depend on market conditions, while borrowers can repay at any time with no fixed schedule or maturity date.

The key risk lies in collateral management. A previously published blog by Coinbase said borrowers must keep their loan-to-value ratio below 86% to avoid automatic liquidation and penalties. That threshold could be tested quickly during sharp market moves, particularly given ether’s volatility relative to traditional assets.

By allowing cbETH to be used as collateral, Coinbase is effectively extending the utility of staked ether beyond passive yield. Users can keep exposure to ETH price movements and staking rewards while still accessing liquidity for large purchases, portfolio rebalancing or one-time expenses.

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

Coinbase said the feature is available immediately in the U.S., minus New York, and positions it as part of a broader push to make crypto holdings more flexible without forcing outright sales in volatile markets.