Circle Introduces Bitcoin-Backed USDC Borrowing Service for Institutions
- Circle has launched a service called Digital Asset-Backed Borrowing, allowing institutional clients to use Bitcoin (BTC) as collateral to borrow USDC.
- Eligible customers can mint Circle’s wrapped Bitcoin token, cirBTC, and supply it as collateral on lending markets like Arc and Ethereum.
- Morpho is currently the first supported lending protocol, with plans to include Aave and others in the future.
- Borrowed USDC will be deposited directly into the customer’s Circle Mint balance, with borrowing rates set by third-party markets.
- The service is overcollateralized, requiring collateral to be supplied through a customer-controlled wallet rather than directly by Circle.
This launch aligns with a broader trend in institutional crypto lending aimed at providing access to crypto-backed borrowing while maintaining custody of collateral assets. Notably, New York clients are excluded from this offering.
Circle’s new service allows institutions to leverage their Bitcoin holdings effectively, marking a significant step in digital asset financing as it integrates with established DeFi protocols like Morpho. (Source)
