- crypto.com will offer customers loans backed by their cryptocurrency deposits.
- Lending protocol Morpho will power these loans and operate on the Cronos blockchain.
- The initiative follows a similar partnership between Coinbase and Morpho earlier this year.
- Deposits in decentralised finance (DeFi) lending protocols reached an all-time high of $138 billion in September.
- The rollout is expected before year-end, making Crypto.com the second exchange to adopt this DeFi-backed loan structure.
Crypto.com will soon allow its users to borrow against their cryptocurrency holdings, launching a new feature powered by the DeFi lending protocol Morpho. The collaboration will integrate Morpho’s services onto the Cronos blockchain, which was created by Crypto.com.
The exchange announced the partnership on Thursday. Crypto.com is the sixth-largest crypto exchange globally and handled $86 billion in trades in the past month, according to Bitcoin/monthly-exchange-volume” rel=”nofollow”>newhedge. “Our mission has always been to accelerate the world’s transition to cryptocurrency, and this collaboration with Morpho and Cronos is a powerful step in that direction,” said Ketat Sarakune, head of yield and asset growth at Crypto.com.
The partnership aims to let customers use their deposited cryptocurrencies as collateral to access loans, rather than sell their assets. Morpho plans to use this integration to access Crypto.com’s client base and increase its deposit volume. The first integrations are planned to launch before the end of this year.
Earlier in January, Coinbase launched a similar feature with Morpho, resulting in over $1 billion in loans. According to DefiLlama data, DeFi lending protocols have reached record deposits of $138 billion. Morpho alone has expanded its deposits by 121% this year, totaling $11.5 billion.
Other large institutions are also moving into DeFi lending. On Tuesday, banking giant Société Générale announced it will connect its stablecoins to Morpho, opening DeFi services to its institutional clients.
A Morpho spokesperson noted the protocol is in discussions with additional fintechs, exchanges, and asset managers for further applications. This strategy, known as the “DeFi mullet,” simplifies DeFi access for customers on established consumer platforms like Crypto.com, while complex DeFi operations remain in the background.
Crypto.com and Morpho also intend to launch new lending markets using wrapped Bitcoin and Ethereum as collateral, and are considering wrapped real-world assets. This expansion comes on top of Crypto.com’s existing DeFi ties with another protocol, Aave, which enables users to lend out Ethereum and earn returns.
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