Circle, the company behind USDC, one of the world’s largest dollar-backed stablecoins, is stepping outside its comfort zone. On Thursday, it announced plans for cirBTC, a wrapped Bitcoin token designed to bring more utility to BTC for institutional users. It’s the company’s most significant product move beyond stablecoins in years.
A wrapped Bitcoin token is essentially a representation of Bitcoin that exists on a different blockchain, typically Ethereum, allowing holders to use their BTC in DeFi applications like lending, borrowing and collateral management without having to sell it. Bitcoin itself can’t natively run smart contracts, so wrapping it makes it compatible with ecosystems that can.
Circle said cirBTC will be backed 1:1 by native Bitcoin, with reserves independently verifiable onchain in real time. The token is planned to launch first on Ethereum and on Arc, Circle’s own Layer 1 blockchain, with integration into its existing infrastructure including USDC and Circle Mint, its stablecoin issuance and redemption platform.
The target audience is institutional: OTC desks, market makers, lending protocols, and other institutions that need tokenized Bitcoin for trading, collateral, and settlement use cases.
“Bitcoin is sitting on the sidelines of DeFi. Not because people don’t want yield or liquidity, it’s because they don’t trust the wrapper,” Rachel Mayer, Circle’s VP of product for Arc, posted on X. Circle CEO Jeremy Allaire framed it as a natural extension of the company’s existing playbook: “We are bringing the same infra that supports USDC, EURC, and USYC to the largest digital asset.”
A crowded market with a messy history
cirBTC is entering a space that already has two dominant players, and a fair amount of baggage attached to both of them.
BitGo’s Wrapped Bitcoin, known as WBTC, is currently the largest product in the category, carrying a market cap of roughly $8 billion. Coinbase’s cbBTC sits at around $6 billion. Together, the combined supply of the two tokens represents approximately 208,000 BTC tokenized on other chains.
The WBTC situation, in particular, opened the door for new entrants. In August 2024, the custodian of WBTC announced a partnership with BiT Global, a company with ties to Tron founder Justin Sun, a connection that made a significant portion of the crypto community uncomfortable.
Coinbase launched cbBTC shortly after, and WBTC’s standing in the market took a hit. Coinbase also eventually delisted WBTC from its exchange, triggering a lawsuit from BiT Global that was later dropped.
Circle’s pitch is essentially that trust is the core problem, and that its track record with USDC gives it a credibility advantage that existing wrapped BTC issuers can’t fully match. The company points to more than $1.7 trillion in Bitcoin currently sitting outside DeFi, which it attributes to institutional wariness around custody risk and reserve transparency. cirBTC is Circle’s answer to that gap.
Whether institutions buy the argument will depend in part on how the product is structured at launch and what the custody arrangements look like in practice. Circle has described cirBTC as being built on the same foundations as USDC, meaning consistent issuance standards, auditable reserves, and its existing compliance and licensing infrastructure across the US and Bermuda.
No launch date yet
It’s worth being clear about what this announcement actually is, which is a product reveal with a waitlist, not exactly a live launch. cirBTC is listed as “coming soon” on Circle’s website, with availability subject to regulatory approvals. No confirmed launch date has been given.
Notably, cirBTC will be one of the few non-stablecoin products in Circle’s lineup. The firm also maintains USYC, a tokenized money market fund acquired through its purchase of Hashnote, and is reportedly working toward a native token for the Arc blockchain, which is expected to reach full mainnet this year.
Circle’s stock has fallen roughly 40 percent over the past six months, which gives the company an added incentive to show investors it has a broader product roadmap beyond stablecoins. At the time of writing, the stock currently trades at $90.
Whether cirBTC delivers on that narrative, though, will depend on how quickly it can win institutional adoption in a market where two well-funded competitors have a significant head start.