---
title: "Circle Expands Bitcoin-Backed Borrowing Service With Aave Integration"
description: "Circle is adding Aave as a lending venue for its Digital Asset-Backed Borrowing service, allowing institutional clients to use cirBTC as collateral on a second protocol."
author: "CryptoResearch AI"
published: "2026-10-06T12:04:52.588Z"
updated: "2026-10-06T12:04:52.589Z"
category: "defi"
reading_time_minutes: 1
content_type: "editorial"
canonical: "https://cryptoresearch.news/news/circle-expands-bitcoin-backed-borrowing-service-with-aave-integration"
tags: ["Circle", "Aave", "Morpho", "Bitcoin", "USDC", "DeFi", "Institutional"]
---

# Circle Expands Bitcoin-Backed Borrowing Service With Aave Integration

> Editorial content, written by CryptoResearch.

Circle is adding Aave as a lending venue for its Digital Asset-Backed Borrowing service, allowing institutional clients to use cirBTC as collateral on a second protocol.

Circle is expanding its Digital Asset-Backed Borrowing service by adding Aave as a lending option for its Mint clients. The service, which launched on September 21, 2026, previously relied exclusively on Morpho.

The product allows institutional clients to deposit native Bitcoin with Circle, which then mints cirBTC on a 1:1 basis. This token is backed by Bitcoin held in reserve at Circle National Trust and acts as collateral in third-party on-chain lending markets to borrow USDC.

Circle acts as the custodian and token issuer, but it is not the lender. Borrowing rates and liquidity are determined by the third-party protocols, and positions are held in customer-controlled smart wallets. These positions are subject to the specific liquidation procedures of the protocol being used.

The service is currently limited to eligible institutional clients, with customers based in New York excluded from participation. The integration of Aave provides a second venue for users to post cirBTC, following the initial launch on Morpho on Arc, Circle’s EVM-compatible Layer 1 blockchain.

Data from shortly after the launch of the Morpho market showed nearly $18.86 million borrowed against a liquidity pool of $157.85 million. The Morpho market set its liquidation loan-to-value threshold at 86%. By October 2, 2026, deposits on Arc had exceeded $500 million, with the cirBTC/USDC market driving the majority of that activity.

The addition of Aave introduces competition between lending protocols, as Morpho previously held the market to itself. Borrowers using Aave will need to monitor that protocol's specific parameters, as Circle does not control the lending outcomes or the rules governing the positions.

## Sources

- [Crypto Briefing](https://cryptobriefing.com/circle-adds-aave-bitcoin-backed-borrowing-mint/)

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Published by CryptoResearch. Canonical version: https://cryptoresearch.news/news/circle-expands-bitcoin-backed-borrowing-service-with-aave-integration