Coinbase DeFi Earn is expanding to eligible customers in Brazil through Morpho. The product offers variable returns on USDC without a fixed lock-up period. Coinbase announced the rollout on Sept. 9 and said access would open over the coming days.
Customers use the Lending tab in Coinbase’s app to choose how much USDC to allocate. Coinbase then sends the funds on-chain to Morpho, which connects lenders with borrowers.
How Does Coinbase DeFi Earn Work in Brazil?
The deposits go into a vault managed by Steakhouse Financial. “Coinbase says that the vault has been audited.” The steakhouse determines how to distribute the money among the lending markets.
The borrowers use crypto as collateral and pay interest to borrow USDC. These interests yield the returns, which are then paid out to the depositors. Coinbase doesn’t have a fixed interest rate.
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The interest fluctuates depending on the supply and demand on Morpho. The increased demand for USDC loans can increase interest rates. Increased deposits and decreased borrowing activity can decrease them.
Users don’t have to lock the USDC for a certain period. They can withdraw the stablecoins and return them at any time. But it may depend on liquidity availability.
Coinbase One members could get a rate bump wherever this feature is provided. The company hasn’t disclosed the interest rate for Brazil, nor has it confirmed if every qualified member would get it.
Where Does Morpho Send Customer Deposits?
Brazil follows a scheme similar to those rolled out in other countries starting September 2025. The original Coinbase DeFi Earn would channel client funds in USDC to Morpho vaults at Base, which is a Layer-2 protocol of Ethereum run by Coinbase.
Interest rates have been as high as 10.8% APY at the time of launch. This was variable and did not ensure future returns.
Total supply is close to $500 million, according to Coinbase. Interest rates have been as high as 7.4% APY recently. Interest rates will fluctuate based on market changes.
Coinbase USDC rewards are completely different from Coinbase DeFi Earn. This is because the lending mechanism uses interest from borrowers to reward depositors.
What Options and Risks Come With the Coinbase DeFi Earn?
Coinbase introduced a vault with Ethena USDC in June. This vault will work differently from the Prime USDC vault by Coinbase because of a different collateral strategy. The prime markets have been based on cbBTC, cbETH, and wrapped staked Ether.
The difference in collateral will result in different liquidity and smart contract requirements for lenders. Coinbase has not specified whether the Brazilian introduction of its platform will include this Ethena-based alternative. The firm’s announcement is about the existing service powered by Morpho.
Coinbase DeFi Earn is different from holding USDC in your regular account at the exchange. Deposits will be used in conjunction with smart contracts and lending pools after on-chain transfer.
Use of the Coinbase mobile app eliminates the need for an additional wallet connection. The user will also not have to choose lending markets manually. But still, the app will not hide on-chain logic behind it.
Why Is Coinbase Expanding in Brazil?
According to Fabio Plein, Coinbase’s managing director for the Americas region, the roll-out is part of the firm’s Everything Exchange strategy. The strategy involves offering services such as lending, staking, and USDC Rewards on one platform.
The expansion happens when Brazil is increasing regulatory oversight of crypto businesses. In June, the central bank introduced independent auditing alongside authorization and renewal of licences of virtual asset service providers.
These reviews should address matters regarding anti-money laundering controls, customer asset separation, internal risk management, and employee compliance programs. Moreover, auditors are required to be registered with Brazil’s securities regulator.
Brazil developed a virtual asset regime in 2022 while entrusting regulatory oversight to the central bank in 2023. Current companies have up to October 2026 to satisfy licensing, custody, governance, and stablecoin requirements.
Chainalysis estimates that Brazil transacted about $318 billion in crypto activities between 2024 and 2025. According to Central Bank Governor Gabriel Galípolo, dollar-linked tokens accounted for about 90% of the crypto activity reported.
According to Resolution BCB No. 561, virtual assets are not allowed in supervised electronic foreign-exchange channels. The resolution does not ban private crypto transactions or stablecoin transfers through exchanges and wallets.
With Coinbase DeFi Earn, Brazilian eligible customers can now seek returns on USDC through a new channel. The return rates are variable, and Coinbase has not announced a fixed launch rate.
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