Overview
- Circle launched Digital Asset-Backed Borrowing in Circle Mint, making the feature publicly available on Sept. 21 and letting eligible institutional customers convert deposited BTC into cirBTC and borrow USDC on Arc and Ethereum.
- The workflow mints cirBTC 1:1 for native Bitcoin held by Circle National Trust, moves tokens into a customer-controlled smart wallet, and supplies them as collateral to a third‑party lending market where the loan is originated.
- Morpho is the first integrated lending protocol and sets interest rates, collateral ratios, liquidation thresholds and available liquidity; Circle says Aave and other protocols will be added later.
- Circle publishes Chainlink on‑chain proof‑of‑reserves showing reserves exceed cirBTC supply and warns that once collateral leaves Mint it is outside the platform’s regulated custody and exposed to smart‑contract, oracle and liquidation risk.
- Day‑one activity on Arc showed strong demand for cirBTC collateral with roughly $150 million plus placed into Morpho vaults, signaling early institutional interest and giving Arc a new use case as a USDC‑native venue for tokenized assets.