Circle Lends Against Bitcoin via cirBTC: Why the Wrapper Can Cost You the German Holding Period

If you do not want to sell your bitcoin but still need liquidity, you have had one more option since September 21, 2026: USDC issuer Circle has launched a lending route called Digital Asset-Backed Borrowing, in which deposited bitcoin serves as collateral and USDC is paid out against it. For you as a German investor, one step in that process matters more than the loan itself, and it sits in the fine print. Before the bitcoin can serve as collateral, it is converted into a different token. In Germany, that conversion is very likely a taxable event, and it starts your one-year holding period again from zero. The American marketing around this product frames it differently. It promises liquidity without triggering a taxable event. Under US tax law that is a defensible reading. It does not carry over to German income tax law, and anyone who adopts it risks a tax bill on gains they could long since have realised tax-free. This article therefore keeps three things apart: what Circle actually launched, what of that is documented, and what you should check in your own holdings even if you will never deal with Circle at all. What Circle launched with Digital Asset-Backed Borrowing Circle is...