Coinbase Disrupts Bitcoin Backed Lending With Low Bar for Servicing Americans

Coinbase is enhancing its Bitcoin-backed lending service by connecting users to lending pools with minimal vetting and no requirement for personal information. While competitors must acquire state licenses, Coinbase operates as a technology provider through its mobile app, allowing customers to deposit funds into Morpho, a decentralized finance (DeFi) protocol. This service offers competitive loan rates, as low as 5%, compared to 10.4% and 9.9% from traditional lenders. Despite regulatory concerns regarding compliance with KYC and AML rules, Morpho's decentralized nature allows for flexibility in user verification. Coinbase's lending product has surpassed $1 billion in loans, with plans to raise limits from $1 million to $5 million. Coinbase has also applied for a national trust charter, which would allow it to expand its offerings while ensuring a level of regulatory oversight.

Source 🔗