Circle Lets Institutions Borrow USDC Against Bitcoin Without Selling
Circle has launched a new feature on its Circle Mint platform called Digital Asset-Backed Borrowing, allowing institutional Bitcoin holders to borrow USDC without selling their BTC. This move is aimed at preventing institutions from having to sell their valuable assets to access cash during market cycles.
The feature works by first wrapping the deposited BTC into a tokenized version called cirBTC, which is then used as collateral in Morpho vaults. The resulting USDC loan settles directly back into the borrower's Circle Mint account, and repayments release the collateral, returning the underlying BTC.
Morpho's market parameters determine interest rates and collateral ratios, rather than Circle setting them. This means that they float with supply and demand. Chainlink's proof-of-reserves verification ensures lenders have on-chain confirmation of the collateral's authenticity.
The service is not available to clients based in New York, and the Arc mainnet launched publicly around September 16, 2026, drawing over $150 million in USDC and EURC deposits on its first day. Circle has plans to expand to additional protocols, including Aave, which has been named as a future integration target.