Circle launches Bitcoin-backed USDC borrowing

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Circle has launched a Bitcoin-backed borrowing service that allows eligible institutional clients to borrow USDC using BTC as collateral.

The service, called Digital Asset-Backed Borrowing, is available to eligible Circle Mint customers. Clients deposit Bitcoin, mint Circle’s wrapped Bitcoin token cirBTC and supply it as collateral to supported third-party lending markets on Arc or Ethereum.

Morpho is the first supported lending protocol, with Circle planning to add Aave and other platforms. Borrowed USDC is deposited directly into the customer’s Circle Mint balance, while lending rates, collateral requirements and liquidation thresholds are set by the third-party protocols.

The positions are overcollateralised and collateral remains in a customer-controlled wallet. Circle does not lend the assets directly. The service is not available to customers in New York.

Circle launched cirBTC on Ethereum in June. The token is backed 1:1 by Bitcoin held by Circle National Trust.