October 15th 2026, 11:38 PM
Aave Launches Dollar-Euro Lending on Circle's Arc Network
Key Summary
Aave V4 has expanded its lending capabilities by introducing dollar-euro borrowing on Circle's Arc network, allowing users to borrow dollars against euros without selling the euros first. The new feature, available in a dedicated Forex spoke, uses a hub-and-spoke design to separate risk and provides a more efficient and liquid lending option. The integration is seen as a significant step forward for the DeFi space and will be closely monitored by regulatory bodies.
Please see our real time news feed on our Home Page
How the Forex Spoke Works
Aave V4 went live on Arc around September 16, 2026, with a lineup of assets including USDC, EURC, cirBTC, and WETH. The protocol uses a hub-and-spoke design, where the Core Liquidity Hub draws liquidity from the Arc network, allowing euro holders to tap the same pool of dollars as everyone else. The key detail is risk separation, with EURC having a 0% collateral factor in the Main spoke, making it unsuitable for borrowing. In contrast, the Forex spoke is where EURC becomes useful collateral, allowing users to borrow USDC against it and keep their euro exposure intact.The Numbers So Far
Data from Aave Tracker and Aavescan as of October 15, 2026, shows a deep hub and a quiet new route. The Arc Core hub held approximately $294 million in supplied liquidity, with around $143 million of that being USDC. Borrowing in the Core hub stood at roughly $110 million, while the Forex spoke had about $68,000 supplied and about $32,000 borrowed. The base borrow rate for the euro stablecoin is around 0.44%.Why Arc, and Why Now
Arc is Circle's own network, and Circle issues both USDC and EURC. The network also comes with an unusual roster of validators, including BlackRock, Visa, and Mastercard. Aave V4 targets stablecoin-native and institutional use cases, making this integration a significant step forward for the DeFi space.#DeFi#Aave#Circle#ArcNetwork#CryptoLending