Circle Launches $18.86M Bitcoin-Backed USDC Borrowing Service
Circle Mint institutions can now borrow USDC against Bitcoin via Morpho on Arc. The market holds $18.86M in debt with an 86% liquidation threshold.
Key points
- Circle launched Bitcoin-backed USDC borrowing for institutions via Morpho on the Arc network.
- The live market shows $18.86 million borrowed with an 86% liquidation loan-to-value threshold.
- Circle provides the interface but does not offer credit, leaving risks to third-party protocols.
Circle launched Bitcoin-backed USDC borrowing for eligible institutions on September 21. This service allows customers to mint cirBTC and borrow stablecoins via third-party protocols.
Morpho is the first supported lending protocol for this new workflow. Circle stated that Aave and other platforms are expected to join the ecosystem later.
Morpho market shows 86% liquidation threshold
The Arc network currently hosts a live market for this specific product. Data from September 22 showed $18.86 million in outstanding borrowing against $157.85 million in liquidity.
The protocol sets an 86% loan-to-value threshold for liquidation events. Total market size reached $176.71 million with utilization at just 10.67 percent.
No bad debt was displayed in the system at verification time. These figures fluctuate as users supply liquidity, borrow funds, or repay existing debt.
Institutions retain Bitcoin exposure during borrowing
Customers keep their exposure to the underlying Bitcoin asset while accessing dollar liquidity. This approach avoids the need to sell the asset to obtain cash flow.
Circle routes transactions through third-party lending markets rather than providing credit directly. Interest rates and collateral limits are determined entirely by the selected DeFi protocol.
Legal terms exclude New York customers
Circle Mint remains an institutional service with strict eligibility requirements. New York customers are explicitly excluded from accessing this borrowing product.
Assets moved into the Smart Wallet exit the regulated Circle Mint environment. Consequently, liquidation risks are governed by external smart contracts and oracle readings.
