Circle has recently emphasized cirBTC as a neutral institutional collateral in a post dated August 12. However, it is important to note that cirBTC is not a new launch as it has been active on Ethereum since June 8. At the time of review, there were only around 40 cirBTC tokens in circulation, in contrast to the more widely adopted WBTC and cbBTC.
cirBTC can be minted and redeemed by eligible institutional participants onchain, but its distribution is currently limited. The Etherscan page for the contract indicates a maximum total supply of 40.01955869 cirBTC with only 11 holder addresses. CoinGecko categorizes the asset as “preview only” and notes that it is not available on the exchanges it monitors.
Circle has introduced Circle Mint as the platform for institutional minting and redemption of cirBTC. Presently, Ethereum is the sole live chain supported by Circle for the token; however, future deployments on Arc with multichain support are in the pipeline.
Understanding the Backing Mechanism
cirBTC is issued by Circle International Bermuda Limited, a Class F digital asset business regulated by the Bermuda Monetary Authority. The underlying bitcoin is secured through Circle’s Bermuda affiliate and held in custody by Circle National Trust exclusively for cirBTC holders. Circle National Trust is described by Circle as a federally chartered national trust bank and qualified custodian overseen by the Office of the Comptroller of the Currency.
According to Circle’s June announcement, the underlying bitcoin is segregated from the company’s corporate assets, ensuring transparency and security for cirBTC holders.
A Circle reserve dashboard updated on August 11 displayed 40.02159077 cirBTC in supply backed by 42.5070808 bitcoins held in reserves. The dashboard provides a list of bitcoin reserve addresses and their balances, enabling counterparties to verify the holdings on the Bitcoin blockchain.
Circle has chosen Chainlink Proof of Reserve over a monthly attestation model for cirBTC to ensure the publication of verified reserve data onchain, allowing users and protocols to monitor the collateralization status of tokenized assets.
Circle’s claim of neutrality pertains to its commercial stance rather than decentralized issuance. The company defines neutrality as refraining from operating competing centralized exchanges, decentralized exchanges, or lending protocols. Minting and redemption processes are facilitated through Circle Mint, while Etherscan recognizes the cirBTC token as a proxy contract.
Comparing cirBTC to WBTC and cbBTC
At the time of review, CoinGecko reported 116,132 WBTC tokens in circulation with a market capitalization of $7.362 billion. Coinbase Wrapped BTC had 97,231 tokens in circulation with a market capitalization of $6.162 billion.
WBTC and cbBTC have a broader presence across multiple chains. WBTC is supported on Ethereum, Solana, Tron, BNB Chain, Base, Kava, and Osmosis according to its official site. CoinGecko lists cbBTC deployments on Ethereum, Base, Monad, Solana, and Arbitrum.
On the other hand, cirBTC does not yet have a tracked price or market capitalization on CoinGecko. Currently, Ethereum is the only live chain supported by Circle for cirBTC, with Arc integration expected in the near future pending regulatory approvals.