Circle’s institutional-grade wrapped Bitcoin product cirBTC has run into a stark adoption gap, while Tether CEO Paolo Ardoino is pushing back against the Bank for International Settlements over whether fully reserved stablecoins are safer than tokenized bank deposits. The combined developments highlight intensifying competition between bank-issued digital money and crypto-native stablecoin and wrapped-asset infrastructure.
Circle’s cirBTC has only about 40 BTC outstanding roughly 11 weeks after its Ethereum launch. An Aug. 27 reserve panel showed 40.02450077 cirBTC outstanding, backed by 42.5114162 BTC across 14 disclosed Bitcoin addresses, equal to approximately 106.2% coverage and a 2.48691543 BTC cushion. For comparison, WBTC had 116,499.2018 tokens and Coinbase’s cbBTC had 98,668.19 tokens, making the incumbents about 2,911x and 2,465x larger. DefiLlama data showed WBTC 24-hour volume of about $110.49 million and $3.12 billion in maximum observed lending exposure; cbBTC recorded $338.55 million in volume and $2.817 billion in maximum observed lending exposure. CoinGecko’s verified cirBTC page showed no tracked 24-hour trading volume, liquidity, or transactions.
Circle built cirBTC with a deliberately formal structure: Circle International Bermuda Limited is the legal issuer, Circle National Trust holds the underlying Bitcoin as custodian after receiving final Office of the Comptroller of the Currency approval in July, and Circle Internet Financial provides Circle Mint for eligible institutions. CEO Jeremy Allaire said in Q2 results that Circle had built “the platform for the internet financial system,” citing $73.3 billion of USDC in circulation and $14.8 trillion in onchain transaction volume. However, a public Aave governance proposal to onboard cirBTC remains pending, and Circle’s planned Arc network is targeting a Sept. 16 mainnet launch with more than 100 builders, but cirBTC’s day-one availability there is unconfirmed.
Tether CEO Paolo Ardoino challenged the BIS preference for tokenized deposits. At the Jackson Hole Economic Symposium on Aug. 28, BIS General Manager Pablo Hernández de Cos argued stablecoins face problems with redeemability, interoperability, financial integrity, and monetary sovereignty, and said tokenized deposits should handle most everyday payments. Ardoino responded: “BIS is rightfully worried about the fact that stablecoins are exposing the emperor without clothes. Why someone should choose to put his savings into a fractional reserve product while stablecoins are fully reserved?”
The debate has spilled into U.S. policy. Banking groups including the American Bankers Association, Independent Community Bankers of America and 76 state banking associations have urged Senate leaders to revise Section 404 of the Digital Asset Market Clarity Act, warning that stablecoin rewards could drain deposits and reduce lending capacity. Citigroup CEO Jane Fraser repeated the concern. Ardoino framed the same shift as a movement into a safer asset class: “We’re in the Find Out phase.” USDT remains the largest stablecoin by circulation, and Tether has expanded through payment and remittance investments, including a May investment in cross-border platform LemFi.
Together, the two stories underline that crypto-native wrapped Bitcoin and stablecoin products still face distribution, liquidity, and regulatory challenges even as banks build tokenized deposit networks.
