Coinbase Now Accepts Tokenized Gold as Collateral for $USDC Loans

Coinbase has officially expanded its Borrow feature to accept PAX Gold (PAXG) as collateral for instant USDC loans, marking the exchange's first integration of a non-crypto commodity for borrowing. This service operates on Coinbase’s Base blockchain and utilizes the Morpho lending protocol to facilitate liquidity for PAXG holders without requiring them to sell their physical gold-backed assets. Each PAXG token represents one fine troy ounce of gold stored in professional vaults, bridging traditional precious metals with decentralized finance infrastructure. By incorporating tokenized gold, Coinbase is extending its lending capabilities beyond native cryptocurrencies like Ethereum and Solana to include real-world assets. The Morpho-powered market currently supports $3.4 billion in collateral and $1.7 billion in active loans, highlighting the scale of this integration. While this move provides new utility for gold investors, users must manage variable interest rates and maintain specific loan-to-value ratios to prevent liquidation. This development signifies a broader trend of integrating high-value, traditional asset classes into onchain lending ecosystems to increase capital efficiency.