Circle has expanded its Digital Asset-Backed Borrowing (DABB) service for institutional clients by adding Aave as a lending option. The product, which launched on September 21, 2026, allows users to deposit Bitcoin to mint cirBTC tokens on a 1:1 basis, which then serve as collateral for borrowing USDC.
Previously, the service operated exclusively through the Morpho protocol on Circle’s Arc blockchain. While Aave was part of the initial product roadmap, the integration was not functional at the time of the DABB launch. The addition provides Mint clients with a second venue to post collateral and secure liquidity.
The DABB service is restricted to eligible institutional clients, with customers based in New York currently excluded. Circle acts as the custodian and token issuer, while borrowing rates and liquidation procedures are determined by the third-party protocols used by the client.
Initial data from the Morpho market showed nearly $18.86 million borrowed against a liquidity pool of $157.85 million. The liquidation threshold for the Morpho market is set at 86%. By October 2, 2026, total deposits on the Arc blockchain had exceeded $500 million.
