Key facts
- Circle launched a Bitcoin-backed borrowing service for institutional clients.
- Clients can use Bitcoin as collateral to borrow USDC.
- Deposited Bitcoin is converted into Circle's wrapped Bitcoin token, cirBTC.
- cirBTC is supplied as collateral to supported third-party lending markets.
- Morpho is the first lending protocol supported, with plans to add Aave.
- Borrowed USDC is deposited directly into the customer's Circle Mint balance.
Stablecoin issuer 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.