See how proof of reserves for wrapped assets works for cirBTC, live on Ethereum with Arc support coming soon, with Chainlink reserve data and verification.
cirBTC is live on Ethereum as a 1:1 BTC-backed token, expanding to Arc when Arc mainnet launches. Learn how segregated custody, visible reserve addresses, and Chainlink Proof of Reserve connect native BTC holdings with the cirBTC token supply.
Bitcoin (BTC) is widely held across global digital asset markets. But native BTC exists only on the Bitcoin blockchain; it has no mechanism to interact with Ethereum or other programmable networks. That means it cannot directly enter the smart contracts where onchain lending, trading, and settlement happen.
Wrapped assets help address that problem. By holding native BTC in custody and issuing a corresponding BTC-backed token on Ethereum or another programmable network, a wrapped asset effectively lets BTC participate in smart contracts — as collateral, in lending pools, for trading and settlement — without the holder selling the underlying position. That utility introduces a fundamental concern: what backs the wrapped token, and how can market participants verify it?
Circle Wrapped Bitcoin (cirBTC) answers that question with 1:1 BTC backing, segregated custody, and verifiable onchain reserve data. It is currently available on Ethereum, with native support coming to Arc when Arc mainnet launches and additional blockchain integrations planned over time.
Why BTC needs a wrapper to work in smart contracts
Bitcoin and Ethereum perform different jobs on different blockchains. The Bitcoin network secures native BTC transfers. Ethereum and other programmable blockchains support smart contracts that coordinate lending, borrowing, collateral, trading, settlement, and more.
A wrapped BTC token like cirBTC enables BTC to exist in those programmable blockchain environments. Native BTC remains in custody on the Bitcoin network while a corresponding token is issued on a supported smart contract blockchain. The BTC-backed token can then move through onchain markets without requiring the holder to sell the underlying BTC position.
But a wrapper adds dependencies native BTC does not have. Tokenized BTC products differ in who holds the underlying asset, whether it is segregated from issuer assets, how supply is controlled, and what counterparties can actually see. Those differences are the product.
There are already multiple tokenized BTC products with different custody, governance, and reserve structures. Those details aren’t trivial; a token wrapper adds dependencies that native BTC does not have. Market makers, OTC desks, lending protocols, trading firms, and asset managers need to understand who safeguards the BTC, whether it is segregated from issuer assets, how token supply is controlled, and whether backing collateral can be monitored as markets move.
Wrapped bitcoin reserves are only as good as what you can verify
A 1:1 claim is easy to make and hard to check. That gap is the real problem: a lending protocol setting collateral parameters, a market maker managing inventory, and a risk desk watching exposure overnight are all pricing the same reserve position, and none of them should have to take an issuer's word for it. What distinguishes a wrapped BTC product is not the promise — it's whether the reserve is segregated, disclosed, and observable onchain. cirBTC is built to be all three.
How cirBTC’s 1:1 custody model is designed
Every cirBTC token is backed 1:1 by native BTC and redeemable 1:1 for native BTC. It is a wrapped token, not a staked version of BTC or a derivative BTC product. The underlying BTC is held through a Circle affiliate and custodied on its behalf by Circle National Trust, a federally chartered national trust bank and qualified custodian under Office of the Comptroller of the Currency (OCC) supervision. The BTC is held for the exclusive benefit of cirBTC holders in accounts segregated from Circle’s corporate assets.
This structure keeps BTC reserve assets legally and operationally separate from Circle's corporate balance sheet. Proof of Reserve addresses the next question: how can the market observe the collateral backing?
How BTC Proof of Reserve works for cirBTC
The cirBTC reserve model connects three observable data points: the native BTC held in disclosed reserve addresses, the onchain reserve value published through Chainlink Proof of Reserve, and the cirBTC supply issued on supported blockchains.
The process works in four parts:
- BTC enters segregated custody. Native BTC backing cirBTC is held through Circle’s Bermuda affiliate and safeguarded by Circle National Trust on the affiliate’s behalf.
- cirBTC is issued against the reserve. An equivalent amount of cirBTC can be minted through the eligible issuance workflow, maintaining 1:1 collateral backing.
- Reserve data moves onchain. Chainlink’s decentralized oracle infrastructure independently verifies reserve information and publishes updates onchain. This creates a machine-readable source that protocols and risk systems can continuously monitor.
- The market can verify the reserves. Circle’s multi-address transparency model identifies the BTC reserve addresses, allowing counterparties to review holdings directly on a Bitcoin block explorer and compare current reserves with the outstanding cirBTC supply.
When cirBTC is redeemed, the corresponding tokens are removed from circulation and native BTC is released through the applicable redemption process. The result is a simple but important control objective: cirBTC in circulation should not exceed the native BTC held in reserve.
cirBTC reserve transparency meets institutional needs
Proof of Reserve can help turn reserve visibility into operational data. A protocol can monitor the feed as part of collateral-risk processes. A trading firm can independently inspect disclosed BTC addresses. An asset manager can evaluate backing without relying solely on an issuer statement.
Public addresses can provide visibility into BTC holding data. Chainlink makes reserve information available inside smart contract environments. Segregated custody defines how the underlying BTC is held. Each layer answers a different question, and together they give institutions a clearer way to assess the asset. Proof of Reserve does not replace custody, redemption, or smart contract diligence, but it does make the reserve side of the diligence process more timely, transparent, and usable.
The BTC reserve standard for wrapped BTC
cirBTC is live on Ethereum, bringing BTC-backed collateral to its established onchain markets. Native cirBTC launches on Arc when mainnet goes live, and the reserve model travels with it.
The same reserve principle is intended to extend as cirBTC reaches additional blockchains: native BTC remains in segregated custody, issued cirBTC remains bounded by that reserve, and reserve data remains observable onchain. This gives institutions a consistent foundation even as liquidity and use cases develop across networks.
Ethereum availability makes that model usable today. Native support at Arc mainnet launch will bring the same reserve foundation into Circle’s full-stack environment. Future integrations can extend the model further without changing its central promise: every cirBTC remains backed 1:1 by native BTC, with reserve data available for onchain verification.
To dive deeper, read the cirBTC whitepaper.
cirBTC on Arc is coming soon, subject to applicable regulatory approvals.
cirBTC is issued by Circle International Bermuda Limited, a Class F Digital Asset Business licensed and regulated by the Bermuda Monetary Authority. Circle Mint and related distribution services are provided by Circle Internet Financial, LLC, NMLS # 1201441.
Arc is an open L1 blockchain launched by Arc Network Services LLC ("Arc LLC") and operated by a permissioned validator set. Arc LLC provides software services only and does not offer regulated financial or advisory services. Arc has not been reviewed or approved by the New York State Department of Financial Services or any other regulatory authority.
The Arc network is provided "as is" and "as available." Use of Arc involves inherent risks associated with blockchain technology, including smart contract vulnerabilities, network disruptions, and the absence of recourse for transaction errors or losses. The ability to transact on Arc depends on the ability to obtain and use USDC to pay gas fees. Neither Arc LLC nor any permissioned validator is responsible for the content, accuracy, legality, or functionality of third-party applications, protocols, or services built on or integrated with Arc. You are solely responsible for features or services you provide to users, including obtaining any necessary licenses or approvals and otherwise complying with applicable laws.
All Arc features may be modified, delayed, or cancelled at any time without notice. Nothing herein constitutes a commitment, warranty, guarantee or legal, regulatory, tax, or investment advice. Coming soon.
USDC and EURC are issued by regulated affiliates of Circle. See Circle’s list of regulatory authorizations.
USDC is issued by Circle Internet Financial, LLC (NMLS #1201441) and is a separate product from any custody services provided by Circle National Trust or Circle New York Trust.
Circle National Trust is the trade name of First National Digital Currency Bank, N.A., a national trust bank chartered and regulated by the Office of the Comptroller of the Currency (OCC), providing custody of digital assets. Digital assets are not deposits, are not insured by the Federal Deposit Insurance Corporation (FDIC), and may be subject to investment and other risks. Circle National Trust does not accept deposits or make loans.
Circle Mint and money transmission services are provided by Circle Internet Financial, LLC. Circle Internet Financial, LLC, NMLS # 1201441, is a licensed provider of money transmission services. See Circle’s licenses here. Circle Mint is currently available only to institutions and is not available to individuals.
