Circle Launches Bitcoin-Backed Loans for Institutional Clients

Circle has launched Digital Asset-Backed Borrowing (DABB), allowing eligible institutional clients to take out USDC loans backed by bitcoin. This new feature enables Circle Mint clients to use bitcoin as collateral to access USDC liquidity without selling their assets.

The process involves minting cirBTC, a tokenized representation of bitcoin, which can be posted as collateral on supported third-party lending markets. Borrowed USDC is then credited directly to the client's Circle Mint balance.

Circle emphasizes that these positions are overcollateralized and that access is determined by collateral parameters and the specific lending market. cirBTC is backed 1:1 by native bitcoin, held through Circle National Trust, a federally licensed trust bank and qualified custodian.

At launch, DABB operates on the Arc and Ethereum networks, with Morpho as the first supported lending protocol. Circle plans to add other venues, including Aave, in the future.