Circle on September 5 put out a close-up explanation of how its cirBTC reserve setup works, stressing that the wrapped Bitcoin product is backed 1:1 by native BTC, with segregated custody and reserves that can be checked on-chain.
Launch and Expansion Plans
Circle says cirBTC is live on Ethereum right now. And once the Arc mainnet is live, it will get native support there too, with a gradual rollout planned for more blockchains over time. Every cirBTC is backed 1:1 by one native BTC, and each one can be redeemed for native BTC at the same 1:1 ratio.
Reserve Management and Custody
As for reserves, the related BTC is held by a Circle affiliate and kept in custody by Circle National Trust, which is regulated by the Office of the Comptroller of the Currency (OCC). Those reserve assets are kept separate from Circle's corporate assets and are used only to safeguard the interests of cirBTC holders.
On-Chain Verification Mechanism
Circle offers on-chain reserve checks through public BTC reserve addresses and the Chainlink Proof of Reserve mechanism. So market participants can watch the size of the BTC reserves and line that up with the circulating supply of cirBTC on each supported blockchain, making sure cirBTC issuance does not go beyond the underlying BTC reserves.
Goal and Use Cases
Circle said the model is meant to give institutions a more transparent standard for wrapped BTC reserves. It also supports using BTC as collateral in on-chain lending, trading, and settlement through smart contracts.