Bitcoin-Backed Loans Now Available on Circle's Institutional Mint Platform
Circle has integrated Bitcoin-backed USDC borrowing into its institutional Mint interface. This move simplifies the workflow, but leaves some risks exposed.
The service uses Morpho lenders to supply borrowed USDC, which is sent to Circle's smart-contract wallet and then transferred back into the customer's Mint balance. The loan itself remains on Morpho, a decentralized lending protocol that connects collateral-backed borrowers with other participants who have supplied USDC.
The process begins when an institution sends Bitcoin to Circle and receives the same amount of cirBTC, which is backed by one native BTC. This value can then be used as collateral for a USDC loan on Morpho. However, a falling Bitcoin price can trigger liquidation, and the protocol relies on an oracle to value the cirBTC.