Coinbase Could Offer USDC Users Morpho DeFi Vaults With Up to 10.8% Yield Amid Regulatory Debate

The crypto exchange integrates Morpho lending into its app, letting USDC users tap DeFi yields of up to 10.8%.

• Coinbase integrates Morpho lending to offer higher USDC yields within the app

• Users can earn up to 10.8% APY on USDC via curated Morpho vaults managed with Steakhouse Financial

• Morpho shows > $8.3B TVL (DefiLlama); institutional DeFi lending is up 72% YTD (Binance Research)

Primary keyword: Coinbase Morpho integration — Earn USDC DeFi yields up to 10.8% in-app. Learn how and risks. Enable now in Coinbase.

What is Coinbase’s Morpho integration and how does it affect USDC yields?

Coinbase Morpho integration embeds Morpho lending vaults into the Coinbase app so users can lend USDC directly without third‑party wallets. The integration enables access to DeFi markets and advertised yields up to 10.8% APY, compared with Coinbase’s native USDC rewards up to 4.5%.

How does the Morpho integration work inside the Coinbase app?

Coinbase has added curated Morpho vaults, with strategy curation by Steakhouse Financial, allowing users to opt into on‑chain lending while remaining within Coinbase’s custody and interface. A Coinbase spokesperson said the exchange integrates only Morpho for this offering and advises users to review in‑app risk disclosures.

Morpho TVL statistics. Source: DefiLlama 

Why are yields higher through Morpho compared with native Coinbase rewards?

Morpho aggregates peer‑to‑peer liquidity and interacts with lending markets to capture interest rate spreads, which can result in higher APYs. Market data shows Morpho among the largest lending protocols with more than $8.3 billion in total value locked, per DefiLlama, reflecting strong liquidity and borrowing demand.

Institutional participation is rising: DeFi lending activity has jumped 72% year‑to‑date according to Binance Research, which supports higher protocol yields as demand increases.

How can users enable Morpho lending in the Coinbase app?

Users can enable Morpho lending through the Coinbase app experience by selecting the DeFi lending product for USDC, reviewing curated vault details, accepting the risk disclosures, and confirming the transfer of eligible USDC into the lending vault. Coinbase handles on‑chain interactions while keeping the UI custodial.

Coinbase currently continues to offer a separate USDC rewards program (up to 4.5% APY); users should compare the programs and understand that DeFi lending APYs can be variable and are subject to market and protocol risk.

DeFi lending protocols, including Morpho, have experienced a significant surge among institutional investors. Source: Binance Research

What regulatory issues should users consider?

The U.S. GENIUS Act bans yield‑bearing stablecoins, creating regulatory scrutiny over products that provide interest on dollar‑pegged tokens. The Bank Policy Institute has urged regulators to close perceived loopholes that might permit yield via third‑party partners.

Coinbase has publicly disputed claims that stablecoins undermine banks and highlights competition with incumbent banking fees. Users should monitor developments in legislation and agency guidance as regulatory outcomes could affect product availability and risk profiles.

Source: Bank Policy Institute

Frequently Asked Questions

How much can I earn by lending USDC through Coinbase’s Morpho integration?

As of the latest update, Coinbase reports potential yields up to 10.8% APY via Morpho vaults. Actual returns vary with on‑chain borrowing demand and protocol performance; compare with Coinbase’s standard USDC rewards (up to 4.5% APY).

Is the Morpho integration safe for retail users?

Safety depends on understanding smart‑contract, liquidity and counterparty risks. Morpho is a large protocol with > $8.3B TVL (DefiLlama), but users should read risk disclosures and consider limiting exposure based on risk tolerance.

Key Takeaways

• Higher yields available: Morpho integration can offer USDC yields up to 10.8% versus Coinbase’s 4.5% rewards.
• Custodial UX: Coinbase handles on‑chain interactions, allowing users to access DeFi without external wallets, but smart‑contract risk remains.
• Regulatory watch: The GENIUS Act and policy debates (Bank Policy Institute) may affect yield‑bearing stablecoin offerings—monitor updates.

Conclusion

The Coinbase Morpho integration brings DeFi lending into a mainstream exchange interface, giving USDC holders a path to materially higher yields while preserving a custodial user experience. Users should balance potential returns with protocol and regulatory risks, and stay informed as legislation and market dynamics evolve.