Circle Launches Bitcoin-Backed USDC Borrowing for Institutions

Circle has launched a new institutional borrowing service that allows clients to use Bitcoin as collateral for USDC loans, marking a significant expansion of its stablecoin ecosystem. The service, called Digital AssetBacked Borrowing, enables eligible Circle Mint customers to deposit Bitcoin, mint Circle Wrapped Bitcoin (cirBTC) tokens, and use them as collateral through third-party lending markets on the Arc or Ethereum networks. The announcement, made on Monday, September 21, 2026, coincided with a broader cryptocurrency market rally that saw Bitcoin surge past $85,000. Circle's stock (CRCL) rose approximately 6% on the day, closing Friday at $91.78 and opening Monday at $98.09. Under the new model, borrowers retain exposure to Bitcoin's price movements while accessing dollar-denominated liquidity. Circle states that each cirBTC token is backed 1:1 by native Bitcoin held in custody by Circle National Trust. The service is initially supported by the Morpho lending protocol, with Circle planning to integrate Aave and other platforms over time. Circle emphasizes that it does not directly lend funds or set borrowing terms.