Circle plans to add Aave to Bitcoin-backed borrowing in Mint

Circle has added Aave as a lending option inside its Bitcoin-backed borrowing service for Circle Mint clients, according to The Defiant. The move extends a product that has so far run on Morpho alone. How the service works Circle formally launched the product, called Digital Asset-Backed Borrowing (DABB), on September 21, 2026. It targets eligible institutional clients who want liquidity but don’t want to part with their Bitcoin. The mechanics run in three steps. A client deposits native Bitcoin with Circle, which mints a token called cirBTC on a 1:1 basis. Each cirBTC is backed by Bitcoin held in reserve at Circle National Trust. That token then serves as collateral in third-party on-chain lending markets. Against it, the client borrows USDC, Circle’s dollar stablecoin. Circle is not the lender in this arrangement. Borrowing rates and available liquidity are set by the third-party protocols. Positions sit in smart wallets that customers control, and those positions follow each protocol’s own liquidation procedures. The service is not available to everyone. Customers based in New York are excluded, which limits the pool to institutions eligible under Circle Mint LLC. From Morpho-on...