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Coinbase introduces USD Coin (USDC) loans using Bitcoin as collateral

  • Coinbase has introduced USDC loans with Bitcoin as collateral.
  • The loans are available for US customers.
  • The loans have no fixed repayment and they auto-adjust based on the activities on Base.

In a move to expand its decentralized finance (DeFi) offerings, Coinbase has introduced a novel service allowing its US customers (excluding those in New York) to borrow USD Coin (USDC) by leveraging their Bitcoin (BTC) as collateral.

This innovative feature, announced in a recent update, aims to provide users with quick and flexible access to funds without the necessity of selling their Bitcoin.

The process leverages Coinbase’s cbBTC stablecoin

Users pledge their Bitcoin (BTC), which is then converted into cbBTC, a wrapped version of Bitcoin specifically designed by Coinbase for use in DeFi applications. This conversion enables Bitcoin, which typically operates outside the DeFi ecosystem due to its technical framework, to interact seamlessly with DeFi protocols.

The cbBTC is subsequently sent to Morpho, a DeFi lending protocol built on Coinbase’s Base blockchain. In return, borrowers receive USDC, a stablecoin pegged to the US dollar, which they can utilize for various purposes such as covering expenses, international transfers, or conversion into US dollars.

The interest rates on these loans are dynamically adjusted based on market activities on the Base blockchain, reflecting Coinbase’s commitment to aligning DeFi with user needs.

Notably, this loan service comes at a time when the crypto lending sector has been under scrutiny following the high-profile bankruptcies of entities like Celsius and BlockFi in 2022, which significantly dented trust in crypto lending.

By integrating with Morpho, Coinbase is stepping in as a middleman to potentially restore some confidence, offering a transparent, smart contract-based lending experience.

No fixed repayment timelines

What sets this service apart is the absence of fixed repayment schedules. Borrowers have the liberty to repay the loan at their own pace, as long as the value of the Bitcoin collateral remains above a certain threshold relative to the loan amount.

However, should Bitcoin’s value plummet, the system is designed to automatically liquidate enough collateral to cover the loan, safeguarding the protocol’s integrity.

The advantages of such crypto-backed loans are manifold. For one, they allow users to bypass immediate capital gains taxes by borrowing against their assets rather than selling them. Moreover, these loans operate on blockchain technology, ensuring transparency and efficiency through automated processes.

The post Coinbase introduces USD Coin (USDC) loans using Bitcoin as collateral appeared first on CoinJournal.

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eToro files for IPO in the US: report

  • Crypto-friendly trading platform eToro files for US IPO.
  • eToro is eyeing the IPO at a valuation of $5 billion.

eToro, a crypto-friendly trading platform and social investment network, has reportedly filed for public listing in the United States.

The Financial Times reported on Jan. 16 that eToro had submitted an application for an initial public offering with the US Securities and Exchange Commission. The company’s quest for an IPO in the US comes with the SEC filing likely opening up eToro’s public trading in New York, the FT reported.

eToro is eyeing the IPO at the valuation of $5 billion, with the trading platform likely to be listed as soon as Q2 of 2025.

While eToro’s largest footprint remains in the United Kingdom, the company wants to tap into the vast potential that’s the US market. The company raised $250 million in a funding round in 2023, with its valuation at $3.5 billion. Ahead of the key milestone, eToro is working with global banks such as Goldman Sachs, UBS and Jefferies as it eyes over $5 billion in the IPO.

eToro, founded in 2007, had increased its business model to include crypto. However, in September 2024, it ceased nearly all of its crypto offerings amid the negative pressure from the SEC.

The post eToro files for IPO in the US: report appeared first on CoinJournal.

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Donald Trump’s team considering XRP, Solana, and USDC strategic reserves

  • Trump’s team eyes XRP, Solana, and USDC reserves as part of the “America-first” policy.
  • The move aims to boost US crypto innovation.
  • However, the move has some wondering whether it will be at the expense of the promised Bitcoin reserve.

Donald Trump’s transition team is actively considering the establishment of strategic reserves for certain digital currencies besides Bitcoin. Sources reveal that the focus is on US-based cryptocurrencies such as XRP, Solana, and the stablecoin USDC, aiming to bolster America’s position in the global crypto market.

This initiative comes as part of Trump’s broader “America-first” policy, which, in the realm of digital finance, could mean a significant shift towards recognizing and supporting cryptocurrencies that originate within the US.

The idea of creating strategic reserves for these assets is seen by some as a way to foster innovation and maintain US dominance in emerging financial technologies.

XRP, Solana, and USDC are all by US-based firms

XRP is associated with Ripple Labs, a cross-border payment company based in San Francisco. Solana (SOL), on the other hand, is associated with Solana Labs which is also based in San Francisco, while USDC is associated with Circle which is headquartered in Boston, Massachusetts, United States.

The inclusion of XRP, which has been embroiled in legal battles with the SEC, could indicate a potential shift in regulatory attitudes under Trump’s administration.

Ripple’s CEO Brad Garlinghouse and other key figures have reportedly engaged with Trump, suggesting a possible thaw in the frosty relations between the crypto sector and regulatory bodies.

Solana, known for its high throughput and being a competitor to Ethereum, along with USDC, one of the most widely used stablecoins pegged to the US dollar, are also under consideration. This move could encourage further development and adoption of these platforms by providing them with a form of governmental endorsement or at least, recognition.

The anticipation around these developments is palpable, with the crypto industry on high alert for any executive orders or policy announcements that might come from the Trump administration upon his inauguration on January 20.

The sector is particularly hopeful for regulatory changes, including the possible repeal of SAB 121, which could open up more avenues for banks to engage with crypto assets.

As we move closer to the inauguration, all eyes will be on whether these strategic reserves will actually be approved and how they might shape the future of cryptocurrency in the US, potentially heralding a new chapter for digital finance under Trump’s leadership.

Does this mean Bitcoin could be sidelined?

However, this strategy has sparked debate within the crypto community. While some celebrate the potential for increased legitimacy and support for US-based digital currencies, others express concern that this focus might sideline Bitcoin, the original and most recognized cryptocurrency.

There’s a worry that such policies might skew market dynamics in favour of these selected altcoins, potentially impacting the decentralized ethos that many in the crypto space hold dear.

However, there are no signs that the transition team is sidelining Bitcoin. Besides, Donald Trump had initially proposed the creation of a Bitcoin reserve during the campaigns. Only time will tell how all this plays out, especially with less than four days remaining for Donald Trump to take the oath of office.

The post Donald Trump’s team considering XRP, Solana, and USDC strategic reserves appeared first on CoinJournal.