Aave V4 has introduced a Forex spoke on the Circle Arc network, allowing users to borrow USDC using EURC as collateral. This design enables users to maintain their euro exposure without selling their assets. The protocol utilizes a hub-and-spoke architecture to isolate risks, ensuring that potential issues with EURC collateral do not impact the main liquidity hub.
As of October 15, 2026, the Arc Core hub held approximately $294 million in supplied liquidity, with $143 million in USDC and $110 million in total borrowing. In contrast, the new Forex spoke remains in early stages, with only about $68,000 in supplied liquidity. The platform is secured by institutional validators, including BlackRock, Visa, and Mastercard.
To manage risks associated with limited secondary liquidity for EURC, the protocol has set a conservative supply cap of 10 million EURC in the Forex spoke. Current demand remains low, evidenced by a base rate of approximately 0.44%. Future adjustments to this limit will depend on governance decisions regarding the depth of secondary market liquidity for the asset.
