Circle has introduced a Digital Asset-Backed Borrowing feature on its Circle Mint platform, allowing institutional clients to obtain USDC loans using Bitcoin as collateral. The service, which launched on September 2, 2026, enables users to maintain their BTC positions without selling them.
The process involves wrapping BTC into cirBTC, a tokenized asset backed 1:1 by holdings at Circle National Trust. The collateral is utilized within Morpho lending markets on Ethereum and Circle's own Arc blockchain. Chainlink provides proof-of-reserves verification for the cirBTC backing.
Morpho serves as the initial lending partner, with interest rates and collateral ratios determined by market supply and demand. Circle plans to integrate additional protocols, including Aave, in the future. The service is currently unavailable to clients based in New York.
Circle's Arc mainnet went public around September 16, 2026. On the launch day of the Arc network, Morpho vaults supported by cirBTC attracted over $150 million in USDC and EURC deposits, signaling significant early demand for the new borrowing capability.
