USDC Stablecoin Issuer Circle Unveils New Token to Give Bitcoin More Utility

Publicly traded stable currency Issuer Circle aims to unlock utility for the world’s largest crypto assets. The solution? A new one packaged Bitcoin token – cirBTC – backed 1:1 with on-chain Bitcoin reserves.

“Bitcoin is on the sidelines of DeFi. Not because people don’t want returns or liquidity, but because they don’t trust the packaging,” said Rachel Mayer, VP of product at Circle and the Arc blockchain, posted on X.

“cirBTC is Circle’s answer: 1:1 backed, on-chain verifiable, and built on infrastructure the market already relies on,” she added.

Circle claims its “proven credibility” and “full-stack flexibility” will make cirBTC an attractive alternative for institutions looking to add utility to BTC.

In other words, the company expects users to want to put their Bitcoin to work, for example through loans or borrowing in decentralized finance (DeFi) applications. By using a packaged Bitcoin product, they can use DeFi protocols and smart contracts on networks outside the native Bitcoin blockchain.

The token will first launch on Ethereum Mainnet and Arc, the stablecoin-focused blockchain incubated by the company, with out-of-the-box integrations with its dollar-backed stablecoin USDC and Circle Mint, its stablecoin issuance platform.

“We are bringing the same infrastructure that supports USDC, EURC and USYC to the largest digital asset, creating a neutral infrastructure for new applications for on-chain BTC,” Circle co-founder and CEO Jeremy Allaire posted on X.

Circle’s wrapped alternative joins existing wrapped Bitcoin tokens such as those from BitGo Packaged Bitcoin (WBTC) and cbBTC, a similar one token offered by Coinbase which can be used on multiple blockchains.

But the alternative options are not without controversy.

In August 2024, WBTC’s custodian announced it was partnering with BiT Global, a company with connections to Tron founder Justin Sun. That invited criticism from some in the crypto communitywho were wary of the connection with Sun.

Following this move, Coinbase launched cbBTC, which drew its own criticism from Sun, who derided the asset as “Bitcoin central bank.”

After launching its own packaged Bitcoin product, Coinbase eventually delisted WBTC from its crypto exchange. which led to a lawsuit from BiT Global claiming a “predatory and unfair move.” That suit was eventually dropped.

At the time of writing, BitGo’s WBTC remains the largest packaged Bitcoin alternative, with a market cap of almost $8 billion at the time of writing. Coinbase’s cbBTC has a market cap of almost $6 billion.

Shares in Circle (CRCL) closed 0.53% lower on Thursday, recently changing hands around $90.26. They are now down almost 40% over the past six months.