Circle Opens Bitcoin-Backed USDC Borrowing To Mint Clients, Routed Through Morpho
The cirBTC market on Arc now holds $14.3 million of USDC borrowed against 287 cirBTC, a sharp rise from $1.37 million on Sept. 17. Most of the USDC supply comes from Galaxy and Keyrock; Circle provides the cirBTC wrapper and the wallet while loan terms are managed through Morpho.
Why It Matters
This arrangement expands a new form of USDC borrowing collateralized by tokenized Bitcoin exposure and shows growing institutional liquidity into the cirBTC market. The split of roles — Circle issuing the wrapper and wallet, third parties supplying dollars, and Morpho setting loan terms — highlights a multi-party structure in DeFi credit markets.
Key Facts
- Market: cirBTC market on Arc
- USDC borrowed: $14.3 million
- Collateral: 287 cirBTC
- Amount on Sept. 17: $1.37 million
- Major dollar suppliers: Galaxy and Keyrock (nearly all dollars)
The cirBTC market on Arc has seen a rapid increase in USDC borrowing. Outstanding USDC loans backed by cirBTC reached $14.3 million, secured by 287 cirBTC. That represents a substantial rise from the $1.37 million in USDC outstanding on Sept. 17.
According to the report, Galaxy and Keyrock are the primary sources of the USDC funding for these loans, supplying nearly all of the dollars borrowed in the market. Circle’s role in the arrangement is to issue the cirBTC wrapper and provide the wallet infrastructure used in the transactions.
Loan economics and terms are not set by Circle; instead, they are managed through Morpho, which handles the loan terms and routing for these borrows. The setup effectively separates issuance and custody from the credit and lending mechanics, spreading responsibilities across multiple firms.
The development underscores growing activity in tokenized-Bitcoin collateral markets on Arc, where institutional liquidity providers and DeFi lending protocols intersect. The report indicates a quick expansion in borrowed USDC against cirBTC over a short period, with market roles divided among Circle, liquidity suppliers, and Morpho.
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