Renowned crypto exchange Coinbase has expanded its Borrow feature. Now, it supports instant $USDC loans backed by tokenized PAX Gold (PAXG). It is allowing eligible users to access liquidity without selling their gold-backed tokens. This is the first time Coinbase is accepting a non-crypto commodity as collateral for its borrowing service. Coinbase has announced this news on its X account officially.
Gold in a vault. Liquidity in your account.
You can now instantly borrow USDC against PAX Gold (PAXG) on Coinbase. Tokenized gold, backed by the real thing.
From crypto to commodities like gold, get instant liquidity without selling.
Powered by @morpho, built on @base. https://t.co/S9scgSpb4g
— Coinbase 🛡️ (@coinbase) November 6, 2026
Coinbase Expands Its Borrow Feature Through Morpho
The new offering uses the Morpho lending protocol and operates on Coinbase’s Base blockchain. PAXG, issued by Paxos, is a tokenized representation of physical gold. Each token is backed by one fine troy ounce of gold stored in professional vaults.
The integration extends Coinbase’s existing crypto-backed lending infrastructure to tokenized real-world assets. Coinbase already allows users to borrow funds against assets such as cbBTC, Ethereum, XRP, and Solana. Its Morpho-powered lending market supports $3.4 billion in collateral and more than $1.7 billion in active loans.
Under the lending arrangement, users lock their PAXG collateral in a Morpho smart contract on Base. The borrowed $USDC is then deposited into their Coinbase accounts. Loans on the variable-rate side generally have no fixed repayment schedule but borrowers must maintain a healthy loan-to-value ratio to avoid liquidation.
The service is available to eligible users in the United States, excluding New York and Canada. However, access, interest rates, loan terms, and eligibility requirements may vary.
Risks and Broader Significance
It is pertinent to mention here that borrowing against PAXG also carries risks. It is because interest rates are variable so borrowing costs can change. A decline in collateral value may push a loan’s loan-to-value ratio beyond the permitted threshold and trigger liquidation.
Morpho has described this launch as another step toward making real-world assets more productive. Although gold represents a multi-trillion-dollar global asset class, only a small portion has been tokenized.
By adding tokenized gold to its Borrow feature, Coinbase is extending onchain lending beyond conventional cryptocurrencies. It is giving PAXG holders another way to access liquidity.