Circle Introduces Bitcoin-Collateral Loans for Institutions
Circle has launched its Digital Asset Backed Lending (DABB) service for institutional customers, allowing them to raise USDC without selling their BTC. This new lending service is part of Circle's expanding infrastructure linking stablecoins and tokenized assets.
The DABB service enables users to deposit BTC into Circle's Mint platform, which mints cirBTC, a wrapped Bitcoin token. Users can then post this collateral on supported lending markets, such as Morpho, to borrow USDC. The borrowed funds are deposited directly into the customer's Circle Mint balance.
Circle has partnered with Arc, a layer-1 blockchain network for stablecoin payments and financial market infrastructure, to support the DABB service. cirBTC also went live on Arc from September 21, coinciding with the release of Arc's mainnet.
This move is part of the growing trend of institutional crypto-collateral lending, which allows users to secure liquidity in on-chain lending markets without disposing of their assets. Other companies, such as Anchorage Digital and BitGo, have also expanded their lending services this year.