Circle Launches Bitcoin-Backed USDC Borrowing as Morpho Shows $18.86 Million in Borrowings
Eligible Circle Mint institutions can mint cirBTC from deposited Bitcoin and borrow USDC through lending markets on Arc and Ethereum without selling their BTC.
Circle has launched a product that lets eligible Circle Mint institutions deposit Bitcoin (BTC), mint cirBTC and borrow USD Coin (USDC) through lending markets on Arc and Ethereum without selling their BTC.
The structure converts deposited BTC into cirBTC, a token backed one-to-one by Bitcoin. Institutions can hold cirBTC in a wallet they control and supply it as collateral in lending markets to obtain USDC liquidity.
The Arc market for USDC backed by cirBTC showed $18.86 million in total borrowings, $157.85 million in liquidity and a $176.71 million total market size at the time of data collection. Its liquidation loan-to-value ratio was 86%, with no executed liquidations and zero realized bad debt.
The market listed Galaxy Curation and Keyrock as curators. Allocations included $76.62 million in a Galaxy USDC vault and $74.99 million in Keyrock Prime USDC.
Morpho is the first third-party lending protocol approved for the product. Aave plans to launch an Arc market, expanding the number of lending venues available to eligible institutions.
Circle Mint access is currently limited to institutions and is unavailable to individuals. Circle launched the product across Arc and Ethereum, allowing eligible customers to use Bitcoin-backed collateral within lending markets while keeping the underlying BTC unsold.
Arc is an Ethereum Virtual Machine-compatible Layer 1 blockchain designed for payments, lending, trading, markets and asset issuance. Its public mainnet launched Sept. 16.
The launch extends the utility of Circle’s cirBTC token for lending and borrowing. Circle launched cirBTC on Ethereum on June 8, and the token is designed to bring native Bitcoin into applications such as lending, borrowing, trading and settlement.
