Circle on September 21 launched Digital Asset-Backed Borrowing for eligible Circle Mint LLC customers, allowing them to deposit Bitcoin, mint cirBTC and borrow USDC through integrated third-party lending markets on Arc or Ethereum without selling their BTC. The service places Circle Mint between a Bitcoin-backed collateral token and external DeFi lending venues, rather than making Circle the party that sets the loan terms.
At launch, Morpho is the supported lending protocol. Circle said other markets, including Aave, are expected to be added. The rollout also coincided with cirBTC becoming available on Arc, extending a token that Circle had launched on Ethereum in June.
Circle Mint routes BTC-backed borrowing through cirBTC
Circle Mint customers deposit BTC, mint cirBTC and supply it from a customer-controlled wallet as collateral for USDC borrowed through an integrated lending market. Circle says the workflow is overcollateralized—the cirBTC supplied exceeds the value of the USDC borrowed—and that the USDC is delivered directly to the customer’s Circle Mint balance; repayment releases the collateral, according to its announcement.
The minting step converts BTC into cirBTC before collateral is supplied, allowing customers to obtain USDC while retaining BTC exposure, subject to the selected lending market’s requirements. Circle frames the service as an expansion of Circle Mint rather than a standalone pool: borrowing occurs through an external protocol, while Circle provides the platform access and settlement path.
Morpho sets the lending terms, with New York excluded
Morpho is the first third-party lending protocol supported by the service, according to Circle. The company has also named Aave as an expected addition, without providing a timetable.
Borrowing rates, collateral requirements and liquidation thresholds are determined by the lending market selected by the customer, not by Circle Mint, according to Cointelegraph’s reporting. Circle Mint handles the BTC-to-cirBTC path and the USDC balance destination.
New York clients are excluded from the offering, Cointelegraph reported. The selected market’s rules determine the terms of an individual borrowing position, including the conditions for liquidation. Circle’s launch announcement describes availability for eligible Circle Mint LLC customers but does not give the full eligibility criteria.
Further markets could give customers additional venues; Circle has said only that those integrations are expected.
Official Circle image for Digital Asset-Backed Borrowing in Circle Mint. — Source: Circle
Arc deployment follows cirBTC’s Ethereum launch
cirBTC became available on Arc on September 21, the same date Circle introduced the borrowing feature. Arc said the token is backed 1:1 by BTC, with the underlying Bitcoin held by Circle National Trust and reserve data published through Chainlink Proof of Reserve.
The Arc availability followed cirBTC’s earlier launch on Ethereum on June 8. That Ethereum release established the BTC-backed token before Circle extended it to Arc and connected it to the new borrowing workflow, according to Circle.
For Circle Mint users, the Arc deployment means cirBTC can now serve as the stated collateral asset on either Arc or Ethereum in the company’s integrated setup. The launch begins with Morpho; the borrowing cost, collateralization standards and liquidation mechanics remain dependent on the market selected for the transaction.
