Crypto21 September, 20262 min read
Circle Launches Bitcoin-Collateralized USDC Borrowing For Circle Mint Customers On Arc And Ethereum
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Circle launches Bitcoin-backed USDC borrowing for Circle Mint on Arc and Ethereum. Users deposit BTC, mint cirBTC, and borrow USDC via third-party lending markets.
USDC Loans With BTC
Circle launched Digital Asset-Backed Borrowing, a Bitcoin-collateralized USDC borrowing service for eligible Circle Mint customers on Arc and Ethereum. Circle said customers can deposit BTC, mint Circle Wrapped Bitcoin (cirBTC), supply cirBTC as collateral through supported third-party lending markets, and receive borrowed USDC directly in the customer’s Circle Mint balance without selling the BTC that supports the position. Circle described the workflow as one coordinated process that unifies steps because BTC does not natively interact with smart contracts, which it said has traditionally required selecting a wrapped BTC option, moving across platforms, navigating protocol interfaces, and managing settlement back into an institutional account.
Circle said the service is overcollateralized and that borrowing rates, collateral requirements, liquidation thresholds, liquidity, and availability are determined by the selected market and can change. Circle said the underlying BTC is safeguarded through Circle National Trust and that every cirBTC is backed 1:1 by native BTC with reserves that can be independently verified onchain.
cirBTC, Custody, Protocols
Circle said cirBTC is issued by Circle International Bermuda Limited, a Class F Digital Asset Business licensed and regulated by the Bermuda Monetary Authority, and it said Circle Mint is currently available only to institutions and not to individuals. Circle said the underlying BTC is safeguarded through Circle National Trust, a federally chartered trust bank and qualified custodian, and it said cirBTC is designed to be strategically neutral because Circle does not operate a competing centralized exchange, decentralized exchange, or lending protocol. Circle said Morpho is the first third-party lending protocol approved for Digital Asset-Backed Borrowing, and it said support for additional protocols, including Aave, will follow as the product develops.
TradingView said the service lets customers deposit Bitcoin, mint cirBTC, and supply it as collateral to supported third-party lending markets on Arc or Ethereum, with Morpho as the first lending protocol supported. TradingView said Circle planned to add Aave and other protocols, and it said New York clients are excluded.
Institutional Liquidity Path
Circle said Digital Asset-Backed Borrowing is designed to let bitcoin anchor a long-term treasury strategy while serving as collateral for USDC liquidity, with customers able to manage their position, add collateral, and repay on their own schedule. Circle said customers can repay borrowed USDC to release cirBTC collateral, and it said customers should review each position’s terms and risk parameters before borrowing. bloomingbit said users can convert Bitcoin into cirBTC, post it as collateral, and borrow USDC through third-party lending protocols, with the first integrated protocol being Morpho.
bloomingbit said Circle plans to expand support to other protocols, including Aave, and it said the service is built on Circle's blockchain Arc and the Ethereum network. DiarioBitcoin said Circle enabled eligible institutional clients to deposit BTC, mint cirBTC, and obtain USDC loans through third-party lending markets on Arc and Ethereum without selling the underlying asset.