- Circle launched a Bitcoin-backed borrowing service for institutional clients, allowing eligible Circle Mint customers to deposit BTC as collateral to borrow USDC via onchain lending markets.
- The service, called Digital Asset-Backed Borrowing, uses Circle’s wrapped Bitcoin token cirBTC supplied to third-party protocols; Morpho is the first supported lending platform, with Aave and others planned.
- Borrowed USDC is deposited directly into the customer’s Circle Mint balance, with borrowing rates and liquidation thresholds set by the third-party market; New York clients are excluded.
- The rollout coincides with cirBTC going live on Arc, Circle’s layer-1 blockchain, and follows a broader trend of institutional crypto-backed lending from firms like Anchorage Digital and BitGo.
Circle has launched a Bitcoin-backed borrowing service for institutional clients, allowing eligible Circle Mint customers to use BTC as collateral to borrow USDC through onchain lending markets. The service, called Digital Asset-Backed Borrowing, lets customers deposit Bitcoin, mint Circle’s wrapped Bitcoin token cirBTC, and supply it as collateral to supported third-party lending protocols on Arc or Ethereum, according to Circle’s blog post.
Morpho is the first lending protocol supported, with Circle planning to add Aave and other protocols. The rollout coincides with cirBTC going live on Arc on Monday, just days after Circle launched the Arc mainnet. Consequently, borrowed USDC is deposited directly into the customer’s Circle Mint balance, while borrowing rates, collateral requirements, and liquidation thresholds are set by the third-party lending market. The borrowing positions are overcollateralized, with collateral supplied through a customer-controlled wallet to third-party DeFi protocols rather than lent directly by Circle. New York clients are excluded.
Meanwhile, Circle previously launched cirBTC on Ethereum in June, with the token backed 1:1 by Bitcoin held in custody by Circle National Trust, as noted in the company’s X post. This launch follows a broader push to give institutional investors access to crypto-backed borrowing while keeping collateral within established custody arrangements. In February, Anchorage Digital partnered with Kamino to allow institutions to borrow against staked Solana held at Anchorage Digital Bank. BitGo also expanded its institutional lending offering in March, launching a financing platform for borrowing and lending against crypto assets held in custody, using a portfolio-based model that allows multiple assets to serve as collateral.
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