Circle Launches Bitcoin-Backed USDC Borrowing for Institutional Clients

Circle has launched a new service that allows institutional clients to use Bitcoin as collateral to borrow USDC through on-chain lending markets. The service, called Digital Asset-Backed Borrowing, lets customers deposit BTC and mint Circle's wrapped Bitcoin token cirBTC, which can then be supplied as collateral to supported third-party lending markets.

The rollout coincides with cirBTC going live on Arc, a layer-1 blockchain that supports 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 previously launched cirBTC on Ethereum in June, and both launches come days after Circle rolled out the Arc mainnet. The service follows a broader push to give institutional investors access to crypto-backed borrowing while keeping collateral within established custody arrangements.