Institutions can now borrow dollars against their bitcoin without selling it...

@circle has launched Digital Asset-Backed Borrowing, a new service that lets institutional clients access dollar liquidity against their Bitcoin holdings without having to sell them. The product went live on September 21 for eligible Circle Mint customers on @arc and @ethereum.

How It Works

The mechanics are straightforward. Customers deposit BTC and mint Circle Wrapped Bitcoin, known as cirBTC. They can then supply cirBTC to supported third-party lending markets and borrow $USDC directly into their Circle Mint accounts. Borrowing positions are overcollateralized, meaning access is based on the value of the collateral and market rules rather than unsecured credit checks.

Each cirBTC token is backed 1:1 with native BTC, with reserves verifiable on-chain. The underlying BTC is held through Circle National Trust, which Circle describes as a federally chartered trust bank. Rates, liquidation levels, liquidity, and collateral requirements are determined by the lending market chosen and may vary over time.

The product is available on both Arc and Ethereum, with @Morpho being the first supported lending protocol. Circle plans to expand access to more lending markets and networks, with @aave support on its way soon. New York-based clients are not included in the initial rollout.

Early Demand and Broader Context

Circle's Arc blockchain went live with Morpho baked in as its primary lending engine, and the results were immediate. Day-one deposits surpassed $150 million across $USDC and EURC vaults, all borrowing against cirBTC.

The cirBTC rollout comes shortly after Arc mainnet launched on September 16. Arc is designed around stablecoin-based financial activity, with $USDC used for transaction fees and settlement, and the network is aimed at applications involving payments, tokenized assets, and other financial use cases. The initiative expands Circle's role beyond stablecoin issuance and into institutional crypto finance.

Circle Internet Group (CRCL) stock rose about 6% on Monday as Bitcoin climbed and the company launched the new institutional borrowing service. TD Cowen raised Circle's price target to $92, citing Arc growth and reserve economics prospects.

Sources:
CoinGape: Circle Rolls Out Bitcoin-Backed Loans for Institutions
Crypto Times: Circle Launches Bitcoin-Backed cirBTC on Arc for DeFi Use
CoinCentral: Circle (CRCL) Stock Jumps 6% as Bitcoin-Backed USDC Borrowing Launches