USDC Issuer Circle Rolls Out Bitcoin-Backed Loans for Institutions

Circle has launched Digital Asset-Backed Borrowing for eligible Circle Mint customers, creating a new institutional use for Bitcoin and USDC. The service enables customers to deposit bitcoin-backed collateral and use USDC without selling their BTC holdings.

Circle Mint Adds Bitcoin-Backed USDC Borrowing

Under the new service, customers deposit BTC and mint Circle Wrapped Bitcoin, known as cirBTC. They can then supply cirBTC to supported third-party lending markets and borrow USDC into their Circle Mint accounts.

The product is available for both Arc and Ethereum, Circle said, with Morpho being the first supported lending protocol. Circle plans to expand access to more lending markets and networks, with Aave support on its way soon. Customers control their positions via their own wallet that is linked to the Circle Mint workflow.

The borrowing positions are overcollateralized, meaning that access is based on the value of the collateral and market rules rather than unsecured credit checks. Rates, liquidation levels, liquidity, and collateral requirements are determined by the lending market chosen and may vary from time to time.

cirBTC Connects Bitcoin Collateral With USDC Liquidity

According to Circle, each cirBTC token is backed 1 to 1 with native BTC, and reserves can be verified on-chain. The underlying BTC is held through Circle National Trust, which Circle describes as a federally chartered trust bank.