I don’t think you understand what Coinbase is doing here. Coinbase is not using fractional bitcoin reserves to lend out to anyone. It’s a collateralized loan s

I don’t think you understand what Coinbase is doing here. Coinbase is not using fractional bitcoin reserves to lend out to anyone. It’s a collateralized loan similar to a HELOC (the equity in your home is collateral) or a margin loan from a broker (your equities are collateral). They want 3x the loan amount because BTC is a volatile asset, and mass margin calls on your customers if the price drops precipitously is bad for business.