Unless you are very foolish, you will choose a bank that is insured by FDIC.
Coinbase is in the trading business.
Why would Coinbase be lending out your Bitcoins, unless someone else is shorting your Bitcoins, and driving down their value?
Not that it matters, since this is a roaring crypto bear market, no short seller would have a problem replacing the Bitcoins he borrowed from your account.
If you have cash in your Coinbase account, and your cash disappears, how does Coinbase explain that, except for criminal fraud or theft?
The exchanges such as Coinbase, Kraken, etc also lend and pay interest if you “stake” your coins.
Additionally there are what amounts to crypto banks like Blockfi, Celsius, Voyager, etc that do the same....lend your coins and pay you interest.
Like with a bank, you agree to allow the bank to convert your holdings and make you an unsecured creditor in the case there’s a run on the bank and they need liquidity. You agree to this as part of their terms of service.
In the US, the FDIC was brought in during the 30s after there had been several bank collapses. You can’t even run a bank if its not part of the FDIC which means for depositors, your deposits are insured up to $200K I believe? That is true even if the bank collapses.