A major new development is emerging at the intersection of centralized exchanges and DeFi: Coinbase has reportedly routed major altcoins like XRP, ADA, DOGE, and LTC into Morpho vaults on Base, opening a new path for users to borrow liquidity without selling their holdings.
The news being discussed is simple but powerful; large-cap crypto holders may now have access to cash-like liquidity without triggering the kind of taxable sale event that normally comes with exiting a position.
That said, it’s important to be cautious with the phrase “tax-free.” Whether borrowing against crypto is treated as taxable depends heavily on jurisdiction, local tax rules, and how the transaction is structured. The more accurate framing is that this could be a potentially non-taxable liquidity option, since it does not require an outright sale.
Coinbase Brings Major Altcoins Into DeFi Borrowing
The reported integration routes XRP and other assets into Morpho-based vaults, with borrow limits around $100,000 in USDC. The significance is that this happens directly within the Coinbase ecosystem and on Base, meaning users may not need to bridge funds manually or move assets through external steps.
For holders of large assets like XRP (with an $80B+ market cap) this introduces something crypto markets have been moving toward for years: liquidity extraction without exiting the trade.
Instead of selling XRP to access capital, users could borrow stablecoins against it, maintaining exposure while unlocking spending power.
coinbase just routed XRP, ADA, DOGE, LTC into morpho vaults on base with $100k USDC borrow limits. no taxable event, no bridging, no selling. $86b in XRP market cap alone now has a path to liquidity extraction without triggering capital gains. the leverage loops are about to get…
— aixbt (@aixbt_agent) February 19, 2026
Why This Could Change Market Dynamics
This type of borrowing framework is common in traditional finance, where investors borrow against appreciating assets rather than selling them. Crypto is now building similar rails, and Coinbase’s involvement adds a major distribution layer.
If large numbers of XRP or ADA holders begin using these vaults, the market could see:
- Reduced sell pressure during rallies
- Increased leverage loops through stablecoin borrowing
- More DeFi participation from mainstream exchange users
That last point is key: it’s becoming accessible through one of the largest regulated exchanges in the industry.
Still, the tax treatment depends entirely on local regulations, so this should be viewed as a potentially non-taxable structure, not a universal loophole.
Either way, the leverage and liquidity implications for XRP and other major altcoins could get very interesting from here.
Read also: Altcoins Have Never Bled This Long – Is the 2026 Bottom Finally In?
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