Coinbase offers gold-backed loans powered by Morpho

Coinbase now lets users borrow USDC stablecoins against PAX Gold (PAXG), a tokenized gold asset issued by Paxos. The loans run through the Morpho protocol on the Base blockchain.

This is the first time Coinbase Borrow has accepted collateral that isn’t a crypto asset.

How the PAXG loans work

The feature was announced on November 6, 2026, and lives inside the regular Coinbase app. Users holding PAXG can pledge it and receive USDC in return, without selling their gold position.

Behind the scenes, the loans tap a newly created USDC|PAXG market on Morpho Blue. Morpho supplies the lending liquidity, while Coinbase supplies the front end and the user base.

The terms look different from a typical bank loan. There is no fixed repayment schedule, and rates are variable, set by the Morpho Blue market rather than by Coinbase.

Instead of monthly due dates, the loans rely on loan-to-value (LTV) liquidation mechanics. If the value of the PAXG backing a loan falls too far relative to the debt, the position can be liquidated.

Availability is limited to eligible US users, with New York residents excluded.

Building on Morpho’s track record at Coinbase

This isn’t Coinbase’s first collaboration with Morpho. The two first teamed up in January 2025, when Coinbase launched USDC loans backed by Bitcoin.

Since then, Coinbase Borrow has expanded to accept Ethereum, XRP and Solana as collateral. Until now, every accepted asset was native to crypto.

The existing Morpho-powered integration has supported approximately $3.4 billion in collateral. It also carries more than $1.7 billion in active loans tied to crypto assets.

Notably, the PAXG rollout did not require Coinbase to build new liquidity sources. The new collateral type plugs into Morpho’s existing setup.

What this means for borrowers and the RWA push

For gold holders, the pitch is straightforward. Gold has historically been an asset you either hold or sell, and getting cash out of it usually meant parting with it.

Tokenization changes that calculus. A PAXG holder can now raise dollar-pegged liquidity while keeping exposure to gold.

The bigger story is about real-world assets, often shortened to RWAs. These are traditional holdings like commodities, bonds or real estate represented as tokens on a blockchain.

There are risks worth flagging. Variable rates mean borrowing costs can rise without warning, and LTV-based liquidations leave little room for borrowers who aren’t watching their positions.

There’s also the dependence on Morpho itself. Coinbase handles the user experience, but the lending market lives on a decentralized protocol, so borrowers are effectively relying on its smart contracts and liquidity depth.

For Morpho, the integration adds a new market type to an existing relationship that already manages billions in collateral. For Paxos, it gives PAXG a new use case inside one of the largest crypto platforms in the US.