{"id":13546,"date":"2026-09-22T04:15:59","date_gmt":"2026-09-22T04:15:59","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=13546"},"modified":"2026-09-22T04:15:59","modified_gmt":"2026-09-22T04:15:59","slug":"circle-launches-bitcoin-backed-usdc-borrowing-leaving-liquidation-risk-with-morpho-protocol","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=13546","title":{"rendered":"Circle launches Bitcoin-backed USDC borrowing, leaving liquidation risk with Morpho protocol"},"content":{"rendered":"<p><\/p>\n<div data-cs-editorial-figure-scope=\"\" data-cs-editorial-quote-scope=\"\" data-cs-image-viewer-scope=\"\" data-single-article-content=\"\">\n<p>Eligible Circle Mint institutions can now deposit Bitcoin, turn it into wrapped cirBTC collateral, and borrow USDC through a Morpho lending market in one coordinated workflow.<\/p>\n<p>Circle made the service live on Arc and Ethereum on Sept. 21, reducing the number of systems a treasury team must navigate to raise dollar liquidity without selling its Bitcoin.<\/p>\n<p>The service remains limited to eligible institutions, excludes New York clients, and is subject to jurisdiction and eligibility. Circle Mint is the account interface, cirBTC is Circle&#8217;s tokenized claim backed by native Bitcoin, and Morpho supplies the third-party lending market.<\/p>\n<p>Under Circle&#8217;s Digital Asset-Backed Borrowing service, customers deposit native BTC, mint cirBTC, and supply the token as collateral through a customer-controlled wallet. Borrowed USDC then settles into the customer&#8217;s Circle Mint balance.<\/p>\n<p>Circle coordinates the experience, but the selected market determines borrowing costs, collateral limits, liquidation thresholds, available liquidity, and availability. Morpho&#8217;s documentation describes each market as its own combination of loan asset, collateral, oracle, interest-rate model, and liquidation loan-to-value limit.<\/p>\n<p>For a treasury team, the streamlined interface does not remove the need to monitor collateral values, utilization, and borrowing costs. A position can become liquidatable even though the underlying Bitcoin was never sold, because cirBTC sits in the lending market.<\/p>\n<div class=\"cs-article-embed\">\n<p> <span class=\"cs-article-embed__related-reading\">Related Reading<\/span><\/p>\n<h3 class=\"cs-article-embed__title\">Aave V4\u2019s Arc market is swimming in $76 million of USDC nobody is borrowing<\/h3>\n<\/p>\n<p> <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\"> <i class=\"fa-light fa-arrow-up-right\"\/> <\/span> <\/div>\n<p>A Sept. 21 snapshot of the Arc market for USDC loans against cirBTC displayed an 86% liquidation loan-to-value limit. It showed $14.13 million borrowed, $162.85 million in available liquidity, a $176.99 million market size and 7.98% utilization. At least one borrow appeared in the activity log that day.<\/p>\n<aside id=\"cs-inline-newsletter-1\" class=\"cs-inline-newsletter\" data-inline-newsletter=\"\" data-newsletter-placement=\"article-midpoint\" data-newsletter-pending-label=\"Joining\u2026\" data-newsletter-pending-status=\"Joining The Catalyst\u2026\" data-newsletter-email-required-message=\"Before sending, please provide your email address.\" aria-labelledby=\"cs-inline-newsletter-1-title\" aria-describedby=\"cs-inline-newsletter-1-copy\">\n<div class=\"cs-inline-newsletter__inner\">\n<div class=\"cs-inline-newsletter__content\"> <span class=\"cs-inline-newsletter__eyebrow\"> <i class=\"fa-regular fa-envelope\" aria-hidden=\"true\"\/> The Catalyst <\/span><\/p>\n<h2 id=\"cs-inline-newsletter-1-title\" class=\"cs-inline-newsletter__title\">What\u2019s moving crypto. Why it matters.<\/h2>\n<p id=\"cs-inline-newsletter-1-copy\" class=\"cs-inline-newsletter__copy\">Get CryptoSlate\u2019s essential stories and what to watch next.<\/p>\n<p>  <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"16\" fill=\"currentColor\" viewbox=\"0 0 16 16\" aria-hidden=\"true\" focusable=\"false\"> <path d=\"M15 3.604H1v1.891h14v-1.89ZM1 7.208V16l7-3.926L15 16V7.208zM15 0H1v1.89h14z\"\/> <\/svg> <span>Published on Substack<\/span> <\/div>\n<div class=\"cs-inline-newsletter__form-shell\">\n<p id=\"cs-inline-newsletter-1-privacy\" class=\"cs-inline-newsletter__privacy\">Seven days a week. Unsubscribe anytime.<\/p>\n<p> <i class=\"fa-regular fa-circle-xmark\" aria-hidden=\"true\"\/> <span>Whoops, looks like there was a problem. Please try again.<\/span><\/p>\n<div class=\"cs-inline-newsletter__success\" role=\"status\" aria-live=\"polite\" aria-atomic=\"true\" tabindex=\"-1\"> <span class=\"cs-inline-newsletter__success-icon\" aria-hidden=\"true\"\/><\/p>\n<div>\n<h3 class=\"cs-inline-newsletter__success-title\">Check your inbox.<\/h3>\n<p class=\"cs-inline-newsletter__success-copy\">Your signup request was sent. If confirmation is required, follow the email from Substack.<\/p>\n<p class=\"cs-inline-newsletter__success-hint\">Look in spam or promotions if you don\u2019t see it.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/aside>\n<p>Those figures show the Arc market was operating, but they are a point-in-time snapshot and do not apply to Ethereum.<\/p>\n<figure id=\"attachment_564708\" aria-describedby=\"caption-attachment-564708\" style=\"width: 720px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"wp-image-564708\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156.png\" alt=\"Flow diagram showing five steps from depositing Bitcoin to receiving USDC in Circle Mint, with Morpho market risks and an Arc market snapshot.\" width=\"720\" height=\"900\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156.png 1122w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156-240x300.png 240w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156-819x1024.png 819w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156-768x960.png 768w\" sizes=\"auto, (max-width: 720px) 100vw, 720px\"\/><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"lazyload wp-image-564708\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156.png\" alt=\"Flow diagram showing five steps from depositing Bitcoin to receiving USDC in Circle Mint, with Morpho market risks and an Arc market snapshot.\" width=\"720\" height=\"900\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156.png 1122w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156-240x300.png 240w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156-819x1024.png 819w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-101b55af-0970-4377-8b75-32c1edb24156-768x960.png 768w\" data-sizes=\"(max-width: 720px) 100vw, 720px\"\/><figcaption id=\"caption-attachment-564708\" class=\"wp-caption-text\">Circle Mint lets eligible institutions convert deposited Bitcoin into cirBTC collateral and borrow USDC through Morpho, leaving market risk with the lending venue.<\/figcaption><\/figure>\n<p>Circle&#8217;s reserve dashboard reported 948.75081803 cirBTC outstanding against 951.25857454 BTC in reserves as of Sept. 20. About 397 cirBTC was on Arc, and about 552 was on Ethereum.<\/p>\n<p>Arc, Circle&#8217;s layer-1 network, is also run by a permissioned validator set, another distinction for institutions choosing among the supported networks.<\/p>\n<p>The launch shortens the path from held Bitcoin to USDC, but it does not turn variable DeFi credit into a fixed Circle loan. Whether the service drives lasting cirBTC demand will depend on continued borrowing activity and market terms after the launch-day snapshot.<\/p>\n<\/div>\n<p>DeFi,Featured,Lending,Stablecoins,Bitcoin,BTC,Circle,ethereum,usd coin,USDCBitcoin,BTC,Circle,ethereum,usd coin,USDC#Circle #launches #Bitcoinbacked #USDC #borrowing #leaving #liquidation #risk #Morpho #protocol1790050559<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Eligible Circle Mint institutions can now deposit Bitcoin, turn it into wrapped cirBTC collateral, and borrow USDC through a Morpho lending market in one coordinated workflow. Circle made the service live on Arc and Ethereum on Sept. 21, reducing the number of systems a treasury team must navigate to raise dollar liquidity without selling its<\/p>\n","protected":false},"author":1,"featured_media":13547,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[91,2682,5089,285,1677,31,257,531,364,5274,131,160,4831,1582],"class_list":["post-13546","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ethereum","tag-bitcoin","tag-bitcoinbacked","tag-borrowing","tag-btc","tag-circle","tag-ethereum","tag-launches","tag-leaving","tag-liquidation","tag-morpho","tag-protocol","tag-risk","tag-usd-coin","tag-usdc"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Circle launches Bitcoin-backed USDC borrowing, leaving liquidation risk with Morpho protocol - 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