Circle Launches BTC-Backed USDC Borrowing Service on Circle Mint

Key Insights

• Circle Mint now lets eligible institutions borrow USDC against Bitcoin without selling their BTC, using cirBTC as collateral through supported lending markets.
• The service launched on Arc and Ethereum, with Morpho as the first integrated lending protocol.
• The launch follows Arc Mainnet’s September 16 debut, extending Circle’s institutional infrastructure around USDC, payments, and onchain financial services.

USDC issuer, Circle, has announced the launch of a new Digital Asset-Backed Borrowing service in Circle Mint on September 21, 2026.

This service allows qualified institutional clients to take out loans against Bitcoin on a collateralized basis in USDC and without having to liquidate the underlying BTC in support of the borrowed amount.

The service will be provided through integrated third-party lending markets on Arc and Ethereum, with Morpho being the first lending protocol to support the service.

Circle said DABB is intended to simplify what previously required several separate steps. Native Bitcoin cannot directly interact with smart contracts, so using BTC in on-chain lending has often required a wrapped asset, transfers between platforms, and separate settlement back to an institutional account.

Under the new process, customers deposit BTC and mint cirBTC. They then choose a supported third-party lending market, provide cirBTC as collateral, and borrow USDC.

The borrowed stablecoin is credited to the customer’s Circle Mint balance. Repaying the USDC releases the collateral.

Circle said the positions are overcollateralized. Interest rates, collateral requirements, liquidation thresholds, available liquidity, and other terms are set by the selected lending market and can change.

That means the cost and structure of each position depend on the market being used rather than on a single fixed Circle borrowing rate.

The service launches on Arc and Ethereum, giving eligible users access to the new borrowing workflow across both networks.

The timing follows Circle’s September 16 launch of Arc Mainnet. The Coin Republic reported that Arc went live with more than 100 institutional and ecosystem builders and was designed for payments, foreign exchange, trading, lending, and other financial-market activity.

USDC is used for transaction fees on the network, while Circle said Arc supports sub-second finality.

That makes the Arc connection particularly relevant to the new borrowing service. The USDC-issuer said Arc brings cirBTC and USDC into infrastructure designed for stablecoin finance, while Ethereum provides access to established onchain lending markets.

For teams already using Morpho, Circle Mint provides a direct route to initiate a cirBTC position and settle borrowed USDC back into the Circle Mint balance.

Circle has also been expanding its payments footprint. The Coin Republic reported on September 8 that Circle agreed to acquire Tazapay, a Singapore-based B2B cross-border payments company operating across more than 100 markets.

Tazapay reported more than $25 billion in annualized payment volume, with over 60% of that volume in stablecoins as of July 31, 2026. The transaction is expected to close in 2027, subject to regulatory approval.

Earlier, an August 28 report from The Coin Republic covered Circle’s partnership with Chelsea Football Club, under which Circle and USDC branding would appear on the club’s men’s and women’s academy teams during the 2026/27 season.

Those developments cover different parts of the business. The latest product is more directly tied to Bitcoin, USDC, and on-chain lending.

The post Circle Adds BTC-Backed USDC Borrowing to Circle Mint appeared first on The Coin Republic.