Circle Unveils Institutional Bitcoin-Backed USDC Lending Service

Circle has introduced a new borrowing service for institutional users that allows them to use Bitcoin as collateral to borrow USDC. The service, called Digital Asset-Backed Borrowing, uses Circle's wrapped token cirBTC, which is backed 1:1 by Bitcoin held in custody by Circle National Trust.

The borrowing workflow uses cirBTC as the collateral token, and borrowers can choose from supported third-party lending markets. Circle plans to start with Morpho and later add Aave and other protocols. The service excludes New York clients at this time.

Circle's model reflects a recurring institutional demand in crypto: access to borrowing and leverage-like liquidity strategies without disrupting existing custody arrangements. By using cirBTC, Circle provides a path to onchain credit while keeping a clear chain of custody and token backing on the issuer side.