Coinbase has expanded its crypto-backed loan service to include XRP, Cardano (ADA), Litecoin (LTC), and Dogecoin (DOGE), allowing eligible U.S. Customers to borrow up to $100,000 in USDC stablecoin against their holdings, the exchange announced February 19, 2026.
The new lending facility, powered by the Morpho onchain lending protocol on Base, provides users with access to liquidity without requiring them to sell their crypto assets. Coinbase charges a one-time fee, added to the principal, for each new loan or increase in loan amount. The service is available nationwide in the United States, excluding New York.
Even as Bitcoin and Ether were previously supported as collateral, the addition of these four altcoins significantly broadens the range of assets eligible for crypto-backed loans. This move targets tokens with large retail followings, assets frequently held in U.S. Customer portfolios, according to Coinbase.
The loans are designed to give investors quick access to capital while potentially avoiding taxable capital gains events that could occur from selling their cryptocurrency. Borrowers can receive USDC almost instantly while maintaining their exposure to the potential upside of their crypto holdings.
However, the terms for Litecoin loans are more conservative than those for Bitcoin or Ethereum. The loan-to-value (LTV) ratio for Litecoin is capped at 49%, meaning borrowers can only access 49% of the value of their Litecoin holdings as a loan. This compares to LTV ratios of up to 75% for Bitcoin, and Ethereum. Automatic liquidation of collateral occurs at a 62.5% LTV ratio.
The expansion into altcoins also comes as institutional interest in Litecoin appears to be growing. Lite Strategy, a publicly traded company, already utilizes Litecoin as its primary reserve currency and reported additional revenue in the second fiscal quarter of 2026 through trading call options on the asset.
Technological developments are also underway for Litecoin. The LitVM testnet is scheduled to launch in the first quarter of 2026, aiming to introduce EVM-compatible Layer-2 smart contracts to the Litecoin network and open it up to decentralized finance (DeFi) applications. The success of this launch will determine whether Litecoin can evolve into a functional DeFi ecosystem.
The Litecoin Summit, scheduled for June 22-23, 2026, in Amsterdam, will bring together developers and investors to discuss further network development and institutional trends. The planned mainnet launch of LitVM later this year will be a key indicator of Litecoin’s progress.
