Circle has opened a route for institutional bitcoin holders to borrow dollars against their holdings without selling them. The stablecoin issuer launched Digital Asset-Backed Borrowing on Sept. 21, letting eligible Circle Mint customers deposit bitcoin, mint Circle Wrapped Bitcoin (cirBTC), and supply it as collateral to third-party lending markets to borrow USDC, according to Circle’s announcement.
How the borrowing workflow operates
The product compresses what Circle describes as a multi-step process into one coordinated flow. A customer deposits bitcoin and mints cirBTC, selects a supported lending market, supplies the wrapped token as collateral through a customer-controlled wallet, and receives borrowed USDC directly in their Circle Mint balance. Repaying the loan releases the collateral.
Circle does not lend the funds or set borrowing terms itself. Rates, collateral requirements, liquidation thresholds and liquidity are set by the selected third-party market, and positions are overcollateralized. Morpho is the first approved lending protocol, with support for additional markets including Aave expected to follow.
cirBTC as institutional-grade collateral
Every cirBTC is backed 1:1 by native bitcoin, with reserves independently verifiable onchain and safeguarded through Circle National Trust, a federally chartered trust bank and qualified custodian. The token is issued by Circle International Bermuda Limited, a Class F digital asset business regulated by the Bermuda Monetary Authority. Circle described the wrapped asset as strategically neutral, noting it operates no competing exchange or lending protocol.
Two networks at launch
Digital Asset-Backed Borrowing debuted on Arc, the stablecoin-focused Layer 1 Circle launched in September, and on Ethereum. Arc brings cirBTC and USDC into Circle-designed infrastructure with competitive borrowing rates, while Ethereum offers access to deep, established onchain lending markets. New York clients are excluded, and Circle said support may expand to additional networks over time.
A broader push for bitcoin-backed liquidity
The rollout extends Circle’s effort to make bitcoin productive as collateral. Circle first launched cirBTC on Ethereum in June with Chainlink-verified proof of reserves, and Arc’s mainnet went live Sept. 16 with BlackRock, DTCC and Visa among its validators. For treasury teams, the product offers a way to keep bitcoin exposure while accessing dollar liquidity through Circle Mint, with borrowed USDC settled directly into the customer’s institutional account.
