Crypto Is Set to Devour Traditional Finance as Coinbase Sharpens Its Focus on Decentralized Systems

Coinbase (NASDAQ:COIN) CEO Brian Armstrong continues to tout the role of cryptocurrency in the future of finance, stating on Wednesday that crypto is “going to eat most of financial services” and that the firm is “100% focused on crypto.”

What Happened: Armstrong’s comments came as Coinbase provides a series of updates on its lending services. These include USDC loans via decentralized lending protocol Morpho Labs (CRYPTO: MORPH) and bitcoin-backed credit products.

As reported by Benzinga previously, adoption of USDC-based loans through Morpho Labs is heating up, with volumes increasing to $120 million in May, according to Max Branzburg, head of consumer products at Coinbase.

“It’s heating up. USDC DEFI [decentralized finance] lending volumes on Morpho went from $0 in Jan to $120M in May (vs $45M in Apr, $14M in Mar, $2M in Feb). Only $265M BTC is used as credit vs >$100x more in "idle" bitcoin.”

It’s heating up. USDC DEFI lending volumes on Morpho went from $0 in Jan to $120M in May (vs $45M in Apr, $14M in Mar, $2M in Feb, and $0 in Jan). Only $265M BTC is used as credit vs >$100x more bitcoin is "idle." https://t.co/16pW2A9M8x

— Max Branzburg (@maxbranzburg) May 24, 2023

Earlier this year, Coinbase announced its bitcoin-backed loan service is now fully available to all U.S. users, except those in New York.

"Great news - we're excited to announce that bitcoin-backed loans are now fully launched and available to all Coinbase customers in the U.S. (except NY). We're also expanding our loan program to include more loan tiers and flexible repayment options. A huge thank you to the teams who worked tirelessly to bring this product to market."

Coinbase is also expanding its loan program to include more loan tiers and flexible repayment options.

Related Link: Bitcoin Backed Loans Now Available Through Coinbase

Why It’s Important: Credit markets are rapidly moving onchain, according to Armstrong.

“We eventually want to small business loans, home loans, car loans, uncollateralized loans, etc. Many people in the world don’t have access to credit and we can make it a more efficient (and global) market onchain.”

Coinbase is making progress in the lending space. Earlier this year, Coinbase announced it is shutting down its Coinbase Credit Union and plans to slash its total workforce by 20%.

Coinbase is currently trading at $71.27 per share.