Coinbase’s fixed-rate Bitcoin loans can put healthy collateral at risk after maturity

Coinbase's new fixed-rate Bitcoin-backed USDC loans give borrowers a set repayment date, but the deadline creates a liquidation risk separate from a falling Bitcoin price. If the debt remains unpaid after maturity, a healthy collateral position can still be liquidated. Morpho announced the offer on September 22, 2026, with the rate and repayment date fixed from the outset.

The loans use Morpho Midnight, the fixed-rate lending protocol beneath Coinbase's new offer. They sit alongside Coinbase's variable-rate loans, which have no set due date. Before a fixed-rate borrower confirms a loan, Coinbase displays an indicative rate and sets the final rate at confirmation. Paying early does not reduce the interest owed. The fixed rate makes the cost more predictable, while the due date changes when collateral can be put at risk.

When collateral can be liquidated

Coinbase says a fixed-rate loan must be repaid in full by maturity or it becomes eligible for liquidation. Morpho's liquidation rules place the healthy-loan post-maturity trigger strictly after the deadline. At the exact maturity time, a healthy position is not yet liquidatable through that route. Once the deadline has passed with debt outstanding, a liquidator can repay the debt and receive collateral even if the position's loan-to-value ratio is still healthy.