Circle launches Bitcoin-backed USDC borrowing for institutional clients
Circle has launched Digital Asset-Backed Borrowing, an institutional service that lets eligible Circle Mint customers use Bitcoin as collateral to borrow USDC through onchain lending markets. Customers deposit BTC, mint Circle’s wrapped Bitcoin token cirBTC, and post it to supported third-party protocols on Arc or Ethereum. Morpho is the first supported lender, with Aave and others planned. Borrowed USDC goes directly into the customer’s Circle Mint balance, while rates, collateral rules, and liquidation thresholds are set by the lending market. Positions are overcollateralized and use customer-controlled wallets; New York clients are excluded. The rollout comes as cirBTC goes live on Arc and shortly after Circle launched Arc mainnet, where USDC is the native gas token. Circle previously launched cirBTC on Ethereum in June, backed 1:1 by Bitcoin held in custody. The move fits a broader institutional trend toward crypto-backed borrowing while keeping collateral in regulated custody.
