Circle (NYSE: $CRCL) has launched Circle Wrapped Bitcoin (CRYPTO: $cirBTC) on its Arc blockchain (CRYPTO: $ARC) and Ethereum (CRYPTO: $ETH), giving Bitcoin (CRYPTO: $BTC) holders a way to use their BTC as collateral in on-chain financial markets without selling the underlying asset.
The 1:1 BTC-backed token would bring Bitcoin into smart contract applications that cannot directly support native BTC, according to a Friday announcement.
Circle said cirBTC is not a derivative or yield-bearing product, but a representation of Bitcoin that can be used across supported lending, trading, and liquidity markets.
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The launch comes as Bitcoin increasingly moves beyond its traditional role as an asset held for long-term exposure. Wrapped versions of BTC allow holders to put their Bitcoin to work in financial applications while maintaining exposure to the underlying asset.
One potential use is borrowing. A Bitcoin miner, trading firm or corporate treasury could deposit cirBTC as collateral and borrow USDC to cover operating costs or working capital without selling BTC.
Other market participants could supply cirBTC or USDC to lending protocols, while liquidity providers could add wrapped bitcoin to decentralized exchange pools.
The financial terms are determined by the individual protocols rather than Circle. Interest rates, collateral requirements, loan-to-value ratios, and liquidation rules can therefore vary between markets.
“Every cirBTC is backed 1:1 by native BTC and redeemable for BTC through the applicable Circle Mint workflow,” Circle said, adding that the underlying BTC is held through Circle’s Bermuda affiliate and custodied by Circle National Trust, while Chainlink (CRYPTO: $LINK) Proof of Reserve provides on-chain reserve data.
Circle has also disclosed reserve addresses that allow market participants to inspect the Bitcoin backing.
The company said cirBTC is intended to expand across smart contract networks over time.
Circle shares are currently trading $84.71 apiece, up 2.18% today.