Circle Lets Institutional Clients Borrow USDC Against Their Bitcoin

Circle has launched a new lending service for institutional clients, allowing them to borrow USDC against their Bitcoin holdings without selling their BTC. This move is part of Circle's effort to court crypto-owning institutions that want liquidity without giving up their assets.

The Digital Asset-Backed Borrowing (DABB) service uses Circle's wrapped token, cirBTC, as collateral. Customers deposit Bitcoin and receive cirBTC, which is then supplied as collateral in a third-party lending market. They can borrow USDC against this collateral, with the loan credited to their Circle Mint balance.

The loans are overcollateralized, meaning borrowers post more value than they take out. This approach consolidates steps that have historically been cumbersome for institutional clients, who often had to navigate multiple platforms and interfaces before settling funds back into an account.