Circle Unveils Bitcoin-Backed USDC Borrowing Service on Arc and Ethereum
Circle has launched a new service that allows eligible institutions to borrow USDC against their Bitcoin holdings, leveraging Circle's tokenized claim backed by native Bitcoin, cirBTC. This streamlined interface is available on both Arc and Ethereum networks, with Morpho providing the third-party lending market.
The service eliminates the need for treasury teams to navigate multiple systems to raise dollar liquidity without selling their Bitcoin. However, it leaves liquidation risk with Morpho protocol, meaning that a position can become liquidatable even if the underlying Bitcoin is never sold.
A snapshot of the Arc market on September 21 showed an 86% liquidation loan-to-value limit, $14.13 million borrowed, and $162.85 million in available liquidity. The service remains limited to eligible institutions and excludes New York clients, subject to jurisdiction and eligibility requirements.