Coinbase has expanded its Morpho-powered lending product to eligible Brazilian customers, offering market-based returns on USDC without a fixed lock-up period.
Summary
- Brazilian users can allocate USDC to Morpho through the Lending tab in the Coinbase app.
- Deposits enter an audited vault curated by Steakhouse Financial, with rates set by lending demand.
- Coinbase said users can withdraw their USDC and accrued rewards at any time.
- The product has attracted nearly $500 million in deposits since its initial US launch.
Coinbase brings USDC lending to Brazilian users
Coinbase said in a Sep. 9 announcement that its DeFi Earn product would become available to eligible customers in Brazil over the coming days.
Users can access the service through the Lending tab in the Coinbase app, where they choose how much USDC to allocate. Coinbase then transfers the stablecoins onchain to Morpho, a decentralized lending protocol that connects lenders with borrowers.
Deposited USDC enters a vault curated by Steakhouse Financial. According to Coinbase, the vault has undergone an audit, while Steakhouse manages how funds are allocated among available lending markets.
Borrowers supply crypto assets as collateral and pay interest to access the USDC provided by lenders. The interest they pay generates the returns distributed to depositors, creating a two-sided lending market without Coinbase setting a fixed rate.
Unlike a term deposit, the product does not require users to commit their funds for a set period. Coinbase said customers may withdraw their USDC and accrued rewards at any time, although access to funds in an onchain lending market can depend on available liquidity.
Returns will change with supply and demand on Morpho rather than remaining at a guaranteed level. When demand for USDC loans rises relative to the available supply, the lending rate may increase; additional deposits or lower borrowing activity can reduce it.
Coinbase One members may receive an added rate increase where the benefit is available. The company did not state the rate Brazilian customers would receive at launch or whether the boost would apply to every eligible Coinbase One account in the country.
Morpho routes deposits through an audited vault
The Brazil rollout extends a lending model that Coinbase first introduced in other markets in Sep. 2025. As crypto.news previously reported, the original product routed USDC into Morpho vaults on Base, Coinbase’s Ethereum layer-2 network.
Under the setup described at the time, Coinbase created a smart contract wallet for a participating user and directed the deposited USDC into vaults curated by Steakhouse. Customers gained access through the exchange’s app, while the lending transactions took place through Morpho’s onchain infrastructure.
Rates reached as high as 10.8% annual percentage yield when the service launched, but the figure was variable and did not represent a fixed return. Coinbase now says the product has accumulated nearly $500 million in total supply and has recently offered rates of up to 7.4% APY.
The current return may therefore differ from both figures as borrowers enter or leave Morpho markets. Coinbase’s regular USDC Rewards program remains separate from the onchain lending product, meaning the two services use different methods to produce payments for customers.
Coinbase also expanded its in-app lending menu in June by adding an Ethena-powered USDC vault. Morpho supplies the lending infrastructure for that product, while Steakhouse also oversees its vault allocations.
The June product uses a different collateral profile from Coinbase’s Prime USDC vault. Its high-yield option includes markets linked to Ethena assets, while the Prime vault has focused on collateral such as cbBTC, cbETH and wrapped staked Ether.
Different collateral structures can expose lenders to different liquidity and smart contract conditions. Coinbase has not said that the Brazilian launch includes the Ethena-linked option, and its Sep. 9 announcement describes access to its existing Morpho-powered DeFi Earn service.
Coinbase separates lending from standard USDC rewards
Coinbase presents the Brazil expansion as another use for USDC balances alongside staking and its regular stablecoin rewards program. Regional Managing Director for the Americas Fabio Plein said the product was part of the exchange’s effort to “make users’ assets work harder for them.”
Plein also linked the launch to Coinbase’s Everything Exchange strategy, under which the company has been adding financial products to a single platform. His statement identified staking and USDC Rewards as other services customers can use to earn from supported holdings.
The lending option carries mechanics that differ from simply holding USDC in an exchange account. Deposits move into an onchain vault, and the available return comes from borrowers rather than a rate set in advance by Coinbase.
Access through the main app removes the need for customers to connect a separate wallet to Morpho or manually select lending markets. Onchain execution, however, means the funds still interact with smart contracts and lending pools even though Coinbase handles the user-facing process.
For US customers, Coinbase introduced the same general model with access in most states but excluded New York when the product first launched in 2025. The Brazil rollout does not change US eligibility or the terms available to American users, though it expands the geographic reach of a product first tested in the US market.
Brazil adds crypto oversight as stablecoin use grows
Coinbase is adding the product as Brazilian authorities place more controls on crypto businesses. In June, the country’s central bank added independent audit requirements to the authorization and license-renewal process for virtual asset service providers.
Required reviews cover anti-money laundering measures, customer asset segregation, internal risk controls and employee compliance programs. Auditors must also be registered with Brazil’s securities regulator, the Comissão de Valores Mobiliários.
Brazil established its first virtual asset framework in 2022 before assigning primary oversight of crypto service providers to the central bank in 2023. Existing firms were later given until October 2026 to meet a framework covering licensing, custody, governance and stablecoin supervision.
A Chainalysis estimate cited in the June report put Brazil’s crypto transaction volume at about $318 billion across 2024 and 2025. Stablecoins account for much of that activity, with central bank Governor Gabriel Galípolo saying dollar-linked tokens represented about 90% of the country’s reported crypto flows.
Recent commercial activity has also extended beyond trading. An August report on Brazilian stablecoin payments found that providers were developing services for financial institutions, cross-border commerce platforms and digital asset companies as regulators increased scrutiny of international transfers.
Brazil’s central bank has restricted the use of virtual assets within supervised electronic foreign-exchange channels under Resolution BCB No. 561. The rule does not prohibit private crypto trading or stablecoin transfers through exchanges and wallets, but regulated eFX providers must use foreign-exchange transactions or non-resident real accounts when settling with overseas counterparties.
