Aave V4 now lets users on Circle’s Arc network borrow dollars against euros without selling the euros first.
The feature lives in a dedicated Forex spoke, where EURC can be posted as collateral to borrow USDC.
How the Forex spoke works
Aave V4 went live on Arc around September 16, 2026. It launched with a lineup of assets that includes USDC, EURC, cirBTC, and WETH.
The protocol uses a hub-and-spoke design. On Arc, the hub is called the Core Liquidity Hub. The Forex spoke draws liquidity from that hub, so euro holders can tap the same pool of dollars everyone else uses.
The key detail is risk separation. In the Main spoke, EURC has a 0% collateral factor. Euro deposits there carry no borrowing power at all.
The Forex spoke is where EURC becomes useful collateral. A user who holds euro stablecoins can borrow USDC against them and keep their euro exposure intact.
Isolating this activity in its own spoke means any trouble with EURC collateral stays contained. The Main spoke does not inherit the currency risk.
The numbers so far
Data from Aave Tracker and Aavescan as of October 15, 2026, paints a picture of a deep hub and a quiet new route.
The Arc Core hub held approximately $294 million in supplied liquidity. Around $143 million of that was USDC. Borrowing in the Core hub stood at roughly $110 million.
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%.
EURC is capped at 10M in the Forex spoke, a conservative limit set because secondary liquidity for the asset is limited. If liquidations ever need to happen, thin secondary markets can make unwinding positions harder, so a smaller ceiling limits the potential damage.
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. BlackRock, Visa, and Mastercard are among the institutional validators securing Arc.
Aave V4 itself targets stablecoin-native and institutional use cases.
What this means
For Aave, the Forex spoke is as much a test of the V4 design as it is a product launch. The hub-and-spoke model is built to let the protocol add specialized markets without exposing the whole system to each new risk.
With roughly $294 million sitting in the Core hub and only about $68,000 supplied in the Forex spoke, there is plenty of room to grow.
The 10M EURC cap is the number to watch. If supply in the Forex spoke starts approaching it, governance will face a decision about whether secondary liquidity has deepened enough to raise the limit.
A base rate around 0.44% for EURC reflects light demand, and any meaningful jump would suggest real usage is picking up.
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.