Coinbase has introduced a new borrowing feature enabling eligible users in the United States to access USDC loans backed by Paxos’s PAX Gold (PAXG) token. Rolled out in early November, this marks the first time Coinbase Borrow has accepted a collateral asset representing physical gold, rather than purely crypto-native tokens.
PAX Gold debuts as real-world collateral
Previously, Coinbase Borrow exclusively supported digital assets such as Bitcoin, Ether, XRP, and Solana as security for loans. With the addition of PAXG, each token of which is backed by one fine troy ounce of gold held in LBMA-accredited vaults, Coinbase has introduced a real-world asset into its lending platform.
This development allows users to obtain USDC loans without liquidating their gold-backed holdings. Inside the Coinbase application, users can pledge PAXG as collateral, maintaining exposure to the gold market while accessing fiat-pegged liquidity.
Coinbase provides the front-end user experience and client base, while Morpho, a decentralized lending protocol, delivers the underlying on-chain borrowing infrastructure and liquidity management.
PAX Gold becomes the first physical asset accepted as collateral on Coinbase Borrow, giving investors a new channel to raise dollar-pegged liquidity without giving up exposure to gold.
Loan terms and integration details
The Coinbase-Morpho integration already supports approximately $3.4 billion in collateral and more than $1.7 billion in outstanding loans across various cryptocurrencies. To incorporate PAXG, the teams established a new market within the existing system, requiring no overhaul of the lending stack.
Interest rates on loans are variable and determined by the Morpho marketplace, rather than set directly by Coinbase. Borrowers are not subject to fixed repayment schedules or minimum payment requirements, offering greater flexibility than traditional structures.
Collateralized positions are governed by loan-to-value requirements. Should the market value of PAXG fall significantly in relation to the outstanding USDC loan, the pledged gold tokens may be subject to liquidation to cover the liability.
User eligibility and market context
Access to this borrowing product is currently available to select U.S. customers, excluding those located in New York. Specific borrowing limits and terms, which may vary by asset, are detailed within the Coinbase app for each eligible user.
While global gold markets total nearly $30 trillion, only a relatively small fraction—estimated at a few billion dollars—has been converted into tokenized form to date. By integrating regulated gold-backed tokens like PAXG as collateral, Coinbase offers holders a novel avenue to access dollar liquidity without leaving the exchange ecosystem.
As market participants seek to watch fluctuations in real-world asset tokenization and corresponding lending opportunities, CryptoAppsy‘s live news and coin-specific monitoring tools can help users track the latest developments in products like PAXG-backed loans on Coinbase. With instant updates and dedicated portfolio tracking, investors can stay informed as new collateral types reshape crypto lending services.
Roughly $3.4 billion in collateral and $1.7 billion in outstanding loans are already supported through the Morpho protocol on Coinbase, reflecting strong user engagement with the lending system.
