Circle Launches Bitcoin-Backed USDC Borrowing for Institutional Clients

Stablecoin issuer Circle has introduced a new lending service that lets institutional clients borrow USDC using their bitcoin holdings as collateral, without needing to sell their assets.

How the Service Works

The offering allows eligible clients to deposit bitcoin, convert it into Circle’s wrapped bitcoin token, and use it as collateral on supported lending platforms. Morpho is the first lending protocol integrated into the system, with plans to add more platforms over time. Borrowed funds are deposited directly into the client’s account balance, while interest rates and collateral requirements are determined by the third party lending platforms rather than Circle itself. The positions require more collateral than the amount borrowed, and the service is not currently available to clients in New York.

Part of a Broader Blockchain Expansion

This launch follows Circle’s recent rollout of its own layer-1 blockchain network designed for stablecoin payments and tokenized financial products, which uses its stablecoin as the network’s native transaction currency and supports several tokenized asset offerings.

Institutional Crypto Lending Continues to Grow

Circle’s move adds to a broader trend of companies offering crypto-backed lending to institutional investors while keeping assets within secure custody arrangements.

Similar services have emerged in recent months allowing institutions to borrow against staked and custodied crypto assets, including solana and bitcoin, through partnerships between custody providers and lending platforms. Some competing models keep the underlying assets in their original form rather than converting them into wrapped tokens, while others allow multiple asset types to be combined as shared collateral.