Circle Unveils Bitcoin-Backed USDC Borrowing via Morpho Protocol
Circle's Digital Asset-Backed Borrowing service is now live on its Arc and Ethereum platforms, allowing eligible institutions to deposit Bitcoin and borrow USDC without selling their cryptocurrency. The service uses Morpho protocol as a third-party lending market, where customers can supply cirBTC collateral and borrow USDC through a customer-controlled wallet.
The service streamlines the borrowing process for treasury teams, reducing the number of systems they need to navigate to raise dollar liquidity. However, it's essential to note that the liquidation risk remains with Morpho protocol, not Circle.
As of September 21, the Arc market displayed an 86% liquidation loan-to-value limit, with $14.13 million borrowed and $162.85 million in available liquidity. The service is limited to eligible institutions and excludes New York clients, subject to jurisdiction and eligibility requirements.