Circle’s cirBTC Takes Aim at Coinbase’s $6 Billion cbBTC Months Before Key Deal Renewal

Circle announced cirBTC on April 2, 2026, a wrapped Bitcoin (BTC) token backed 1:1 by native BTC with real-time onchain reserve verification, marking the firm’s first expansion beyond stablecoins into tokenized BTC infrastructure. The announcement puts Circle in direct competition with its largest distribution partner at a commercially sensitive moment. A Trust Problem Worth $1.7 Trillion Circle, the issuer of USDC stablecoin, frames cirBTC as a neutral, institution-grade alternative to existing wrapped BTC products. It is built on the same compliance and issuance foundations that support USDC and EURC. “Bitcoin is sitting on the sidelines of DeFi. Not because people don’t want yield or liquidity — it’s because they don’t trust the wrapper,” said Circle VP of Product Rachel Mayer, identifying the core market thesis behind cirBTC. The wrapped BTC sector has faced sustained credibility issues. In August 2024, BitGo’s Wrapped Bitcoin (WBTC) drew criticism after its custodian partnered with BiT Global, a firm linked to Tron founder Justin Sun. Coinbase launched cbBTC (Coinbase Wrapped BTC) shortly after, and currently holds roughly $6 billion in circulating supply according to CoinGecko data. Coinbase Wrapped BTC (cbBTC). source: Coingecko Circle is positioning cirBTC as a more transparent option. Reserves will be independently verifiable onchain in real time, with no reliance on third-party attestations. The token launches first on Ethereum and Arc, Circle’s Layer-1 blockchain, with multichain support planned. Target users include OTC desks, market makers, lending protocols, and derivatives platforms. Partnership Tension Ahead of August Renewal The timing carries weight beyond product competition. Circle and Coinbase operate under a revenue-sharing agreement tied to USDC reserve income, up for renewal in August 2026. Under the current deal, Coinbase receives 100% of interest on USDC held on its platform and a 50/50 split on off-platform holdings. Analysts estimate t...