Circle launches Bitcoin-backed USDC borrowing, leaving liquidation risk with Morpho protocol
Summary
Circle launched a service for eligible institutions to deposit Bitcoin, mint the reserve-backed cirBTC token, and use it as collateral to borrow USDC through Morpho markets on Arc and Ethereum. Borrowed USDC settles into Circle Mint, streamlining access to dollar liquidity without selling BTC. The service excludes New York clients, and borrowing terms—including rates, collateral limits, and liquidation thresholds—depend on the selected market. An Arc snapshot showed an 86% liquidation loan-to-value limit, $14.13 million borrowed, and 7.98% utilization; these figures do not apply to Ethereum. The service remains variable-risk DeFi credit, with collateral subject to liquidation if market conditions worsen.
