What Makes a Wrapped Asset Institutional-Grade?

Circle outlines a seven-part framework for evaluating institutional wrapped assets, emphasizing custody, reserves, redemption, compliance, operational resilience, governance, and composability as interconnected requirements for assets used in trading, lending, collateral, and settlement. It argues that a wrapped token’s reliability depends on the full system supporting it, including segregated custody, verifiable 1:1 backing, defined redemption procedures, clear regulatory and operational responsibilities, secure change controls, and usable liquidity and integrations across networks. Applying the framework to its cirBTC product, Circle states that the token is backed 1:1 by Bitcoin held in segregated custody by Circle National Trust, with onchain reserve data supplied through Chainlink Proof of Reserve and disclosed Bitcoin addresses. cirBTC is redeemable through Circle Mint for eligible institutional customers, is issued through a Bermuda-regulated affiliate, and is available on Arc and Ethereum, while users remain responsible for assessing the risks of individual protocols, smart contracts, markets, and blockchain networks.

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