Circle has launched cirBTC on the Ethereum network. The token enables Bitcoin to access smart contracts and lending protocols that are not available to BTC itself.
“The launch is aimed at institutional participants, including lending platforms, OTC desks, market makers, and treasury operations,” the company said in a post on its official website.
Bitcoin cannot interact directly with Ethereum smart contracts. Wrapped versions solve this issue by issuing a token that can be used within decentralized finance. According to the company, Bitcoin holders will be able to use their BTC as collateral in third-party protocols without having to sell the underlying asset.
The underlying Bitcoin is held in Circle’s regulated custody framework and is segregated from the company’s corporate funds. Reserve transparency is provided through Chainlink Proof of Reserve, allowing users to verify holdings directly on the Bitcoin blockchain. The issuance and redemption of the token are handled through the Circle Mint platform.
Circle stated that it does not operate its own exchange or lending protocol and that its goal is to support wider adoption of the token.
Ethereum has been chosen as the starting point, but cirBTC has also been designed for Arc, the network currently being developed by Circle, as well as for the company’s broader multichain strategy.