Circle Technology Services, LLC announced on Monday that eligible Circle Mint LLC customers can now borrow against Bitcoin holdings through a new service built on Morpho. The following day, Coinbase launched fixed-rate crypto- and tokenized-stock-backed loans through its app, also powered by Morpho, via a fixed-rate layer called Midnight. The near-simultaneous rollouts underline how central Morpho has become as a lending layer for regulated crypto institutions, a development European users of both platforms will encounter as tokenized collateral markets expand.
Circle's new offering, called Digital Asset-Backed Borrowing, lets customers deposit native BTC, mint a token called cirBTC, and use it as collateral to borrow USDC. "Deposit BTC. Mint cirBTC. Borrow USDC," Circle said in a tweet announcing the service. Approved loans deliver USDC directly to the customer's Circle Mint balance without requiring the sale of native BTC reserves. The company described the workflow as coordinated: "Through one coordinated workflow, customers can use BTC-backed cirBTC as collateral through supported third-party lending markets on Arc."
cirBTC is backed 1:1 by native Bitcoin, with reserves verified continuously through Chainlink Proof of Reserve. The underlying BTC is held in Circle National Trust, a bank regulated by the U.S. Office of the Comptroller of the Currency, and is segregated from corporate assets and exempt from rehypothecation. Operational execution runs through a smart wallet managed with 2-of-2 multi-party computation. Circle said it does not evaluate unsecured credit or operate the lending protocol itself; interest rates, loan-to-value ratios and liquidations are delegated to Morpho's smart contracts and independent liquidity managers. "cirBTC is now live on Arc," the company confirmed, noting the service deployed simultaneously on Ethereum and on Arc, Circle's own Layer 1 blockchain. Within days, the cirBTC market on Arc had drawn over $14 million in USDC borrowed, with liquidity supplied mainly by Galaxy USDC and Keyrock Prime USDC curated vaults. Circle framed the wrapped Bitcoin as infrastructure for broader use: "Circle Wrapped Bitcoin brings 1:1 BTC-backed liquidity into the Economic OS for internet-native financial markets, helping participants use BTC across lending, trading, collateral, settlement, and treasury workflows."
Tokenized stocks as collateral
A week earlier, Morpho had already enabled credit markets backed by tokenized Coinbase equities on the Base network, covering shares of Apple, Alphabet, Nvidia, Meta Platforms and SpaceX. "Stock-backed loans are live on Morpho," the protocol announced, adding that "users can lend and borrow against @coinbase tokenized stocks at variable & fixed rates on @base." These tokenized assets are issued under the Abu Dhabi Global Market regulatory framework by Coinbase Onchain SPV Ltd and restricted to investors outside the United States. Coinbase's tokenized stocks were first issued in August for non-US users. Risk and credit parameters for these equity markets are managed by curator Steakhouse Financial, using Chainlink V2 oracle adapters and utilization-adjusted yield models.
Coinbase's fixed-rate loans, available in the US except New York, extend an approach the exchange previously tested with cbBTC on Base. "Digital Asset-Backed Borrowing is now available in Circle Mint for eligible Circle Mint LLC customers," Circle reiterated, while Morpho pointed users toward its partner's product: "Learn more about @Coinbase Fixed Rate Crypto-backed Loans."
Morpho's architecture relies on isolated vaults and indivisible primitive markets rather than the monolithic, globally governed pools used by protocols such as Aave. That design allows asset managers including Galaxy, Keyrock and Bitwise to structure their own yield vaults on top of Morpho's immutable smart contracts, a division of labour that appears to be attracting some of the largest names in regulated crypto infrastructure.
