Crypto.com Integrates Morpho to Launch Stablecoin Lending on Cronos

Highlights:

• Crypto.com will integrate Morpho on Cronos to let users borrow stablecoins against wrapped BTC and ETH this year.
• Stablecoin lending on Crypto.com will stay legal in the US as it involves borrowers and lenders, not the issuers.
• Coinbase and Crypto.com expand DeFi access while banks push back with new stablecoin projects and holding limits.

Crypto.com announced that it will integrate Morpho, the second-largest decentralized finance lending protocol, into the Cronos blockchain. The move will allow users to deposit wrapped Ether (CDCETH) and wrapped Bitcoin (CDCBTC) and borrow stablecoins against them. This will create new lending markets on Cronos later this year.

⚡https://t.co/CrV1TYS8SO + MORPHO BRING YIELD TO CRONOS

💹 Users can now earn stablecoin yield on wrapped $BTC

+ $ETH via Morpho vaults integrated into Cronos.

📲 Features live inside https://t.co/6TlZampLUM app & exchange.

🐸 DeFi mullet vibes: centralized front, degen… pic.twitter.com/lQL8C3CCoM

— Buzzer ⚡ (@TheBuzzerrrr) October 3, 2025

By adding Morpho, Crypto.com aims to keep funds inside the Cronos ecosystem and make the lending process smoother. Users will experience a front-end user experience but interact with a decentralized infrastructure. Wrapped assets are valuable in this process since they allow users to access DeFi services without reducing native chains across chains.

According to DefiLlama, Morpho has already secured more than $7.79 billion in total value locked. It has become the second-largest DeFi lending protocol by matching lenders and borrowers on top of platforms such as Aave and Compound. The protocol uses a peer-to-peer layer to optimize rates for both sides. With the direct integration into Crypto.com, users will not need to rely on external wallets or separate platforms.

Crypto.com Integrates Morpho to Reach U.S. Users Despite Restrictions

The integration also raises attention in the United States, where regulators have placed limits on stablecoin issuers. The GENIUS Act, signed into law in July, prevents issuers from paying reserve yields directly to holders. However, stablecoin lending remains legal because it involves borrowers and lenders rather than issuers.

Merlin Egalite, Morpho’s co-founder, explained that lending a stablecoin is a different activity from receiving reserve yields. This distinction makes the service available to U.S. users despite the new restrictions. As a result, Crypto.com can offer stablecoin lending markets without violating the law.

Morpho will operate directly through the Crypto.com interface, so users will not need to leave the app. This design eliminates the complexity of having two separate wallets and third-party DeFi platforms. It also makes sure that a larger number of people can be involved without a high technical understanding.

This capability to provide such services to the U.S. customers is a significant development. Many American users lost access to similar products after regulators tightened rules around interest-bearing stablecoins.

Exchanges and Banks Compete in Digital Finance

The partnership follows another Morpho integration earlier this year. Coinbase added the protocol into its app, enabling customers to lend USDC through vaults managed by Steakhouse Financial. The feature advertises potential yields of up to 10.8%, higher than the 4.5% that Coinbase offers for simple USDC rewards.

Coinbase CEO Brian Armstrong later outlined his ambition to transform the platform into a complete financial “super app.” This vision places crypto exchanges in direct competition with traditional banks. Banks have already raised concerns about the growth of stablecoins and their potential to draw large deposits away from traditional systems.

In August, the Bank Policy Institute and major U.S. banks urged Congress to close what they called stablecoin loopholes. They warned that trillions in deposits could shift into crypto markets if regulators failed to act. Coinbase rejected those claims, stating that banks were protecting outdated business models built on heavy fees.

JUST IN: 🇺🇸 US banks are lobbying to block stablecoin interest, warning it could trigger trillions in deposit outflows – Financial Times

Wall Street realizing Bitcoin and crypto are beating them at their own game. 😅 pic.twitter.com/tP89P38RPo

— Bitcoin Archive (@BTC_Archive) August 25, 2025

In the meantime, banks are still testing blockchain products. Citigroup is testing its own stablecoin, and JPMorgan has also introduced deposit tokens to its institutional clients. The Bank of England also suggested strict ownership of stablecoins, a proposal that has already provoked backlash throughout the industry.