Coinbase announced plans to introduce spot borrowing with leverage of up to 10x for eligible traders. The service will roll out in the coming weeks, though availability will depend on customer eligibility and selected jurisdictions.
US access to the spot borrowing product will be limited to Eligible Contract Participants, a category that typically requires discretionary investments exceeding $10 million in aggregate, or exceeding $5 million when the transaction is for risk management purposes, according to a 2021 CFTC commissioner statement. Most US retail customers will be excluded from the service.
The margin lending will be conducted through Coinbase Custody International Limited or Coinbase Credit, Inc., though traders will manage spot borrowing and derivatives exposure through a shared margin portfolio.
Leverage and Collateral Terms
For qualified customers, Coinbase will offer maximum leverage of 10x on selected major assets and 5x on other supported assets. Traders can post collateral in more than 15 supported assets, with holdings remaining on the Coinbase platform.
Coinbase warns that collateral can be liquidated without notice and that borrowed trading magnifies both losses and gains. Losses can exceed the initial deposit.
Unspecified Terms
The announcement does not specify borrowing rates, collateral valuation haircuts, discounts applied to pledged assets, or liquidation thresholds. These terms will determine the cost of using the service and when collateral becomes subject to liquidation.
