Circle unveils cirBTC, a 1:1 Bitcoin-backed token to enable DeFi applications

Circle, the issuer of the USDC stablecoin, has unveiled cirBTC, a new Bitcoin-backed token designed to bring the world’s largest digital asset into decentralized finance applications, including lending, borrowing, and liquidity protocols. Circle said the product aims to address the “trust deficit” that has constrained competing wrapped Bitcoin offerings.

Launch plans and blockchain support

Circle said cirBTC is set to launch on Ethereum and Circle’s Arc blockchain. Additional chain integrations are expected in the coming months.

The announcement is Circle’s most direct entry into Bitcoin infrastructure to date, extending a product portfolio previously focused on dollar-denominated stablecoins and tokenized money market instruments.

What cirBTC is

Circle described cirBTC as Circle Wrapped Bitcoin, backed 1:1 by BTC and “readily verifiable onchain.” The token is intended to be compatible with decentralized finance infrastructure and Circle’s existing systems.

Circle positioned cirBTC as an infrastructure product rather than a speculative offering. Circle CEO and co-founder Jeremy Allaire said in a post on X that Circle is “bringing the same infra that supports USDC, EURC, and USYC to the largest digital asset,” creating “a neutral infrastructure for new applications for on-chain BTC.”

Problem statement: Bitcoin’s limited DeFi participation

Circle’s VP of Product Rachel Mayer said Bitcoin has been “sitting on the sidelines of DeFi” not due to a lack of demand for yield or liquidity, but because users “don’t trust the wrapper.”

According to Circle, cirBTC is designed to reduce counterparty risk perceptions by using custodial architecture and issuer credibility as differentiators from existing wrapped Bitcoin products.

How cirBTC works on Ethereum and Arc

Circle said cirBTC will operate on Ethereum and Arc, Circle’s stablecoin-optimized Layer 2 network developed since 2024. Circle said Arc is designed to support gas-free transactions using a combination of:

• Native USDC fee settlement
• A developer-sponsored “Gas Station” model
• A “Paymaster” system enabling USDC-denominated gas on external chains, including Ethereum, Polygon, and Solana

Scale of the opportunity and intended use

Circle cited that $1.7T of bitcoin is sitting on the sidelines of DeFi. The company said this is not because users do not want yield or liquidity, but because they do not trust the wrapper.

Circle said cirBTC is not yield-bearing by design. Instead, it is intended as a liquidity representation of Bitcoin that can be deployed into external yield strategies by holders or protocols. Circle contrasted this with USYC, its tokenized money market fund that enables 24/7 USDC redemptions and generates returns within Circle’s own stack.