12 October 2026
Circle Introduces USDC Borrowing for Institutions Using Bitcoin as Collateral
Circle has unveiled a groundbreaking lending service tailored for institutional clients, allowing them to borrow USDC by leveraging their Bitcoin assets. This initiative, known as Digital Asset-Backed Borrowing (DABB), aims to provide liquidity to crypto treasury departments while retaining their Bitcoin holdings.
Under this service, institutions can deposit Bitcoin and receive Circle's wrapped Bitcoin, cirBTC, which is fully backed by the original asset. The cirBTC is then used as collateral in third-party lending markets, enabling clients to borrow USDC that is credited directly to their Circle Mint balance.
Circle emphasizes that the loans are overcollateralized, meaning borrowers must provide collateral exceeding the value of the USDC borrowed. This structure allows for flexibility, as clients can manage their collateral and repayments according to market conditions rather than traditional credit assessments.
Currently, the only lending protocol available for this service is Morpho on the Arc and Ethereum networks, with plans to expand to other platforms like Aave in the future. Circle's approach aims to simplify the borrowing process, which has historically involved complex steps and multiple platforms.
With the launch of this service, Circle positions cirBTC as a reliable institutional-grade collateral option, backed by assets held in Circle National Trust, a federally chartered trust bank. This strategic move not only enhances liquidity options for institutions but also reinforces Circle's commitment to providing innovative financial solutions in the crypto space.
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