Coinbase Supercharges DeFi Liquidity with USDC as Active Loans Hit $40.7B Milestone
DeFi just got a Wall Street-sized adrenaline shot—Coinbase is now funneling USDC into decentralized finance protocols, turbocharging liquidity as the sector smashes records with $40.7B in active loans.
The move signals crypto's quiet coup: traditional finance rails are getting sidelined by algorithmic lending markets that never close. No bankers, no branches—just code and cold hard stablecoins.
And let's be real—after watching banks take 3 business days to move money while charging $25 for the privilege, maybe it's time for disruption. The irony? That $40.7B loan book would make most regional banks blush.
Time for growth
Coinbase’s first Bootstrap Fund helped establish marketplaces for USDC across blue-chip DeFi protocols such as Uniswap, Compound, and DYDX during the early stages of DeFi development.
Notably, USDC has become the leading stablecoin in DeFi with an estimated $8.9 billion in total value locked (TVL) and $2.7 trillion in annual on-chain transaction volume.
A Coinbase spokesperson explained in a note that the timing reflects current market conditions and growth opportunities:
The record-breaking $40.7 billionrepresents one factor motivating the fund’s launch.
However, the spokesperson noted crypto-backed loans constitute “a prime example of this adoption and ongoing growth, but not the only reason” for the initiative.
The fund seeks to ensure deeper liquidity for stablecoins across the on-chain ecosystem, enabling users to access reliable rates across both established and emerging protocols.
Scaling over time
Coinbase plans to scale the fund over time and distribute liquidity across additional protocols and stablecoins beyond the initial four recipients. The launch can have a direct and positive impact on USDC usage in DeFi.
Adding more liquidity to the largest decentralized money markets will decrease the borrow rate for USDC on those venues, potentially making the stablecoin more interesting for on-chain leverage. The fund could also bring more money on-chain.
Lastly, the company expressed particular interest in collaborating with pre-launch teams or projects seeking to drive stablecoin growth from inception.
The spokesperson concluded:
