Circle Mint lets institutions borrow USDC against Bitcoin without selling their BTC

Circle has introduced a Digital Asset-Backed Borrowing (DABB) feature on its Circle Mint platform, allowing institutional investors to borrow USDC against Bitcoin collateral without liquidating their underlying BTC positions. Under the new workflow, institutions deposit BTC, which is held in custody by Circle National Trust and wrapped into cirBTC on a 1:1 basis. Collateral backing is verified via Chainlink proof-of-reserves, and the tokens serve as collateral inside integrated Morpho lending vaults. The service went live across both Ethereum and Circle's new Layer 1 EVM-compatible blockchain, Arc. On Arc's launch day, cirBTC-backed Morpho vaults attracted over $150 million in USDC and EURC deposits, signaling strong initial institutional appetite. Lending rates and collateral requirements float dynamically based on Morpho's market-driven supply and demand parameters rather than fixed institutional rates. This product launch provides institutional holders with operational liquidity and capital efficiency while eliminating taxable events from outright BTC sales. By embedding decentralized lending directly into institutional custody infrastructure, Circle aims to drive activity to its Arc network and reduce selling pressure on Bitcoin across market cycles.