Hey, it's Marc.

On Tuesday Circle added Aave to the bitcoin-backed borrowing service inside Circle Mint, its platform for institutions. The service opened with Morpho on September 21. Institutions deposit bitcoin, Circle wraps it into a token called cirBTC, and they borrow USDC against it from a lending pool. The dollars land back in their Circle Mint account.

The timing explains the design. In July the OCC gave Circle's trust bank final approval, and that charter doesn't allow it to make loans. So Circle built the front door to a loan and let someone else be the bank.

What this means in plain English:

  1. Circle holds your bitcoin and gives you a token, cirBTC, worth one bitcoin each.

  2. You post that token in a lending pool, on Morpho or Aave, and borrow dollars against it.

  3. The dollars come from the pool's depositors, not from Circle.

  4. The pool's code sets the rate, and sells your bitcoin if its value falls too far.

  5. So this is not a Circle loan. It is Circle's front door to someone else's loan.

Why it matters: Everyone will call this Circle launching bitcoin loans. We think the useful read is who holds which piece. Circle keeps the customer, the custody and the dollar. The pool keeps the decision to sell your bitcoin, and it never picks up the phone.