Circle Introduces Bitcoin-Backed Borrowing for Institutional Clients
Circle has introduced a new service for institutional clients, allowing them to borrow USDC using Bitcoin as collateral. The Digital Asset-Backed Borrowing service enables customers to deposit BTC and mint Circle's wrapped Bitcoin token cirBTC, which can be used as collateral in onchain lending markets.
The rollout coincides with the launch of cirBTC on Arc, a layer-1 blockchain targeting stablecoin payments and financial markets. The 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.
Circle's service follows a broader push to give institutional investors access to crypto-backed borrowing while keeping collateral within established custody arrangements. Other companies, such as Anchorage Digital and Lombard, have also launched similar services in recent months.