Circle's Digital Asset-Backed Borrowing Service Takes Off
Circle Internet Group's stock rose by around 6% on Monday as the company launched its new institutional lending product, Digital Asset-Backed Borrowing. This service allows eligible Circle Mint customers to use Bitcoin as collateral to borrow USDC without selling their BTC.
The service is available through supported on-chain lending markets on Arc and Ethereum, with Morpho being the first third-party lending protocol supported by the service. Circle plans to add Aave and other protocols over time.
The borrowing positions are overcollateralized, meaning they are based on a customer's Bitcoin holdings rather than traditional unsecured credit underwriting. Interest rates, collateral requirements, liquidation thresholds, and available liquidity are determined by the selected third-party market.