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Coinbase fixed-rate Bitcoin USDC loans face liquidation after maturity

CryptoSlate says Morpho allows post-maturity liquidation if the loan balance remains unpaid, even when collateral value and loan-to-value look healthy.

Reported · Written up by our desk · Market Structure

Coinbase has introduced fixed-rate Bitcoin-backed USDC loans through Morpho that come with a set repayment date, but the maturity deadline can create liquidation risk even if the borrower’s collateral remains in a healthy position, according to CryptoSlate.

CryptoSlate reports that if a fixed-rate loan is not repaid in full after maturity, it can become eligible for liquidation through Morpho’s post-maturity rules, where a liquidator may repay the debt and take collateral even when the loan-to-value ratio still appears healthy.

The outlet adds that Morpho can also permit health-based liquidation before maturity if changes in collateral value or debt push the position beyond a liquidation threshold, meaning borrowers can face both a repayment deadline and a collateral-health trigger.

Coinbase sends maturity reminders seven days, three days, and 24 hours before the fixed-rate loan comes due, but CryptoSlate says borrowers still must repay the full balance by the deadline even when those reminders arrive.

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