Key Highlights
- Circle Wrapped Bitcoin (cirBTC) is now available on the Arc blockchain.
- Each cirBTC is backed 1:1 by Bitcoin held in custody for token holders.
- Eligible Circle Mint customers can use cirBTC as collateral to borrow USDC through third-party lending markets.
Circle, the issuer of USDC, has launched Circle Wrapped Bitcoin (cirBTC) on Arc, allowing Bitcoin holders to represent BTC on the network and use it across supported onchain applications.
According to Circle’s September 21 announcement, each cirBTC is backed 1:1 by Bitcoin held in custody for token holders. The token can be used in supported lending, trading, settlement, and treasury applications on Arc.
The rollout also includes a borrowing option for eligible Circle Mint customers, who can use cirBTC as collateral to obtain USDC through third-party lending markets.
How cirBTC works
Bitcoin cannot directly interact with smart contracts on networks such as Arc. A tokenized representation such as cirBTC allows BTC to be used within applications operating on another blockchain.
Circle said the Bitcoin backing for cirBTC is held by Circle National Trust, a federally chartered national trust bank, on behalf of the Circle affiliate responsible for holding the BTC for token holders. The company said the underlying Bitcoin is segregated from its corporate assets and that cirBTC is neither a derivative nor a staking product.
Reserve information is published through Chainlink Proof of Reserve, allowing the reported Bitcoin backing to be monitored on-chain.
Eligible users can borrow USDC against BTC
The launch also brings Digital Asset-Backed Borrowing (DABB) to eligible Circle Mint customers. Under the arrangement, customers can deposit BTC, mint cirBTC, supply the token as collateral through approved third-party lending markets, and receive USDC in their Circle Mint accounts.
The process involves depositing BTC, minting cirBTC, supplying the token as collateral, receiving USDC, and repaying the loan to release the collateral.
Circle said the lending services are provided by independent third parties and that it does not originate, underwrite, or fund the loans.
The structure allows users to seek dollar liquidity against their Bitcoin without selling the underlying asset.
cirBTC can move between Ethereum and Arc
cirBTC is available on Arc through Arc Portal, Circle’s transfer interface for moving supported assets between networks.
Users holding cirBTC on Ethereum can transfer the token to Arc, while users on Arc can exchange supported assets, including USDC, for cirBTC.
Once on Arc, cirBTC can be used with applications that support the asset. Arc said lending integrations include Morpho and Aave, although borrowing conditions, liquidity, and limits are determined by the individual protocols.
Launch follows Arc mainnet debut
The cirBTC rollout comes shortly after Arc mainnet launched on September 16.
Arc is designed around stablecoin-based financial activity, with USDC used for transaction fees and settlement. The network is aimed at applications involving payments, tokenized assets, and other financial use cases.
The addition of cirBTC gives supported applications access to Bitcoin-backed collateral alongside the network’s existing USDC infrastructure.
Earlier this month, KuCoin also enabled direct USDC transfers to Arc, providing another way for users to move the stablecoin onto the network.
Bitcoin adds a new collateral option on Arc
The cirBTC launch gives eligible users a way to use Bitcoin within Arc-based lending markets without directly selling their BTC.
However, the rollout does not yet indicate how much liquidity or borrowing activity the token will attract. Adoption will depend on lending-market liquidity, protocol integrations, and demand from users seeking credit against Bitcoin.
For now, the key development is the availability of a 1:1 Bitcoin-backed token on Arc, alongside a borrowing mechanism for eligible Circle Mint customers and transfers between Ethereum and Arc.
Also Read: World Money Expands Stablecoin Finance App Across 150+ Countries
