Coinbase said Friday that customers who hold PAX Gold, a token backed by physical gold, can now borrow against it on the exchange, stretching its lending business beyond cryptocurrencies for the first time.
PAXG holders can pledge the token and instantly borrow USDC, a stablecoin designed to hold a one-to-one value with the U.S. dollar, the company <a href="https://x.com/coinbase/status/2118727681886105975" rel="noopener noreferrer nofollow">announced</a> Friday morning.&nbsp;
The loans are powered by Morpho, an onchain lending protocol, and built on Base, the blockchain backed by Coinbase.
The feature is available in the United States, excluding New York, the company <a href="https://x.com/coinbase/status/2118727694192156834" rel="noopener noreferrer nofollow">said</a>. Eligibility and terms vary by jurisdiction and market conditions.
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 <figcaption>How Coinbase's PAX Gold loans work. Source: Coinbase, Nov. 6, 2026; Paxos; Morpho.
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<h2 id="how-the-loans-work">How the loans work</h2>
PAX Gold is issued by Paxos Trust Company, a federally regulated custodian.&nbsp;
Each token is backed by one fine troy ounce of a London Good Delivery gold bar held in custody, and <a href="https://paxos.com/paxgold" rel="noopener noreferrer nofollow">Paxos</a> calls it the largest OCC-regulated gold-backed token, with roughly $2 billion in circulation and monthly attestation reports.
A customer holding PAXG can lock it as collateral and receive USDC without selling the gold position.&nbsp;
There are no credit checks, since the collateral itself secures the loan, and Coinbase sponsors the network fees, per its product <a href="https://help.coinbase.com/en/coinbase/trading-and-funding/loan/loan-intro" rel="noopener noreferrer nofollow">page</a>. 
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 <figcaption>
 New gold-backed Visa card has big rewards for user (1:36)
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Borrowed USDC can be converted to dollars, spent or moved onchain, but Coinbase's terms bar using loan proceeds to trade on its own platform.&nbsp;
The wider crypto-backed loan product has limited availability in the U.K. and Canada, but Coinbase has not said whether the gold token option extends beyond the U.S.
<h2 id="rates-are-variable-liquidation-is-the-risk">Rates are variable, liquidation is the risk</h2>
The loans have no monthly due dates and can be repaid in part or in full at any time. Interest rates are set by supply and demand in Morpho's open lending market rather than by Coinbase.
<blockquote>
 "Rates are variable and subject to change," the company said in a <a href="https://x.com/coinbase/status/2118730034105991551" rel="noopener noreferrer nofollow">note</a> on eligibility and market conditions.
</blockquote>
Instead of a fixed schedule, the loans rely on a collateral buffer. If the value of the pledged gold falls too far against the debt, the position can be liquidated, meaning the collateral is automatically sold to cover the loan.
A one-time processing fee is added to the principal each time a user borrows, and interest accrues on the combined amount.
<h2 id="loan-originations-already-past-1-billion">Loan originations already past $1 billion</h2>
The gold option extends a product Coinbase first <a href="https://www.coinbase.com/blog/now-get-a-USDC-loan-without-selling-your-crypto" rel="noopener noreferrer nofollow">launched</a> through Morpho in January 2025, starting with Bitcoin and carrying the same New York carve-out.
Onchain loan originations on the exchange passed $1 billion by October 2025, the company said in a <a href="https://www.coinbase.com/blog/Bitcoin-at-Coinbase-A-Report-on-Innovation-and-Growth" rel="noopener noreferrer nofollow">report</a> on its Bitcoin business.
Borrowing caps on the existing product run as high as $5 million in USDC against Bitcoin and $1 million against Ether, with limits for PAXG shown in the app. The collateral list already covers tokens including XRP, Dogecoin, Solana and Cardano, but PAXG is the first tied to a physical commodity.
Morpho, the protocol underneath, is software on the blockchain that matches lenders and borrowers through pooled funds, with no bank in the middle. It <a href="https://morpho.org" rel="noopener noreferrer nofollow">describes</a> itself as an open credit network with more than $16 billion in deposits, counting Coinbase, Robinhood and Société Générale among the firms building on it.

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