Circle launches USDC borrowing service for institutions using Bitcoin collateral

Circle, the company behind the USDC stablecoin, announced a new product that allows eligible institutional customers to borrow USDC by using Bitcoin as collateral. The service, called Digital Asset‑Backed Borrowing (DABB), is now available to Circle Mint clients, except those based in New York.

How the service works

Clients deposit Bitcoin and receive Circle’s wrapped Bitcoin token, cirBTC, which is claimed to be backed one‑to‑one by the underlying coin. The cirBTC is supplied as collateral in a third‑party lending market, and the borrowed USDC is credited to the client’s Circle Mint balance. Repayment releases the cirBTC collateral.

Collateral and loan terms

Loans are over‑collateralized, meaning borrowers must post more value than they receive. Borrowing rates, collateral requirements, liquidation thresholds and availability are set by the chosen lending market and can change over time. Currently, the only supported protocol is Morpho, with plans to add others such as Aave.

Supported blockchains

The service operates on Ethereum and Circle’s own Arc blockchain, which launched its mainnet the week prior to the announcement.

Institutional‑grade security

The underlying Bitcoin is held by Circle National Trust, a federally chartered trust bank and qualified custodian. Circle says reserves can be verified on‑chain, positioning cirBTC as a “strategically neutral” collateral asset.