Key facts
- Circle launched Digital Asset-Backed Borrowing for eligible institutional clients.
- Clients deposit Bitcoin, which is converted to cirBTC, to borrow USDC.
- cirBTC is backed 1:1 by native Bitcoin held in custody by Circle National Trust.
- The service is available on Arc and Ethereum networks, with Morpho as the first supported lending protocol.
- Circle plans to add Aave and other lending markets to the service.
- Borrowing positions are overcollateralized and determined by third-party lending market rules.
Circle has launched a new service, Digital Asset-Backed Borrowing, enabling institutional clients to leverage their Bitcoin holdings for USDC liquidity without selling their cryptocurrency. Eligible Circle Mint customers can deposit Bitcoin, which is then converted into Circle's wrapped Bitcoin token, cirBTC. This cirBTC can be supplied as collateral to supported third-party lending markets, such as Morpho, which is the first protocol integrated, with plans to include Aave and others. The borrowed USDC is directly deposited into the client's Circle Mint balance. Borrowing rates, collateral requirements, and liquidation thresholds are determined by the third-party lending markets, and positions are overcollateralized. Circle previously launched cirBTC on Ethereum in June, and the token is backed 1:1 by Bitcoin held in custody by Circle National Trust. This launch follows Circle's recent rollout of its Arc layer-1 blockchain, designed for stablecoin payments and financial markets, which supports tokenized assets like BlackRock's BUIDL and Circle's USYC. The move aligns with a broader industry trend of providing institutional investors with crypto-backed borrowing options while maintaining collateral within established custody arrangements. Similar offerings have been introduced by Anchorage Digital, Lombard, and BitGo. Following the announcement, Circle's stock (CRCL) rose 2% to $93.69, with TD Cowen analyst Bryan Bergin maintaining a Buy rating and increasing the price target to $92 from $87.