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CBTC Overview

⚠️ API Disclaimer: CBTC APIs are subject to change. There is no formal versioning policy today. Breaking changes are communicated via the site changelog.

What is CBTC? Bitcoin on the Canton Network

Section titled “What is CBTC? Bitcoin on the Canton Network”

CBTC is a 1:1 wrapped Bitcoin token built on the Canton Network, a privacy-first blockchain for institutional finance. Each CBTC is fully backed by native BTC held in decentralized custody using FROST threshold signatures. CBTC is CIP-56 compliant, meaning it works with any Canton token-standard-compatible tool out of the box.

CBTC brings Bitcoin’s liquidity into Canton’s privacy-enabled smart contract environment, where app developers and trading firms can build trading, DeFi, custody, and settlement applications without exposing positions to a public mempool. Unlike wrapped Bitcoin on public chains, CBTC transactions are private by default, eliminating MEV (Maximal Extractable Value) risks like front-running and sandwich attacks.

Key properties:

Property Value
Backing 1 CBTC = 1 BTC, always
Standard CIP-56 (Canton Instrument Protocol)
Custody Decentralized via FROST threshold signatures (no single party can move reserves)
Network Canton Network (permissioned, private transactions)
Audit Quantstamp audit report
Confirmations 6 Bitcoin block confirmations (~60 minutes) for minting

CBTC Architecture: How Wrapped Bitcoin Works on Canton

Section titled “CBTC Architecture: How Wrapped Bitcoin Works on Canton”

The CBTC system bridges Bitcoin’s UTXO model to Canton’s Daml-based smart contract network through three layers:

1. Bitcoin Layer

Section titled “1. Bitcoin Layer”

Bitcoin transactions are monitored and verified. A user sends BTC to a generated Taproot deposit address. The system waits for 6 block confirmations before proceeding.

2. Attestor Network

Section titled “2. Attestor Network”

A decentralised network of institutional-grade node operators independently verify Bitcoin deposits and withdrawals. Each Attestor runs nodes on both the Bitcoin and Canton networks. Key details:

  • Operators: Pre-screened institutional node operators (including providers like Finoa and Nethermind)
  • Threshold: A configurable M-of-N threshold of Attestors must approve every mint and burn operation
  • Coordination: A Coordinator executes periodic checks (every 60-120 seconds), monitors deposit accounts, constructs Bitcoin transactions, and submits governance actions
  • No unilateral control: No single party - including BitSafe or the Coordinator - can mint, burn, or move BTC without threshold approval

3. Canton Asset Layer

Section titled “3. Canton Asset Layer”

Daml contracts mint and burn CBTC tokens, but only after the required threshold of Attestor signatures is reached on the governance contract. CBTC is then held in the user’s Canton party, fully under their control.

flowchart LR
 A["Bitcoin Network<br>(Taproot deposit address)"] -->|"6 confirmations"| B["Attestor Network<br>(FROST threshold signing)"]
 B -->|"M-of-N approval"| C["Canton Network<br>(Daml contracts mint CBTC)"]
 C -->|"Burn request"| B
 B -->|"Signed BTC tx"| A

Security Model: FROST Threshold Signatures for Bitcoin Custody

Section titled “Security Model: FROST Threshold Signatures for Bitcoin Custody”

CBTC’s security rests on FROST (Flexible Round-Optimised Schnorr Threshold Signatures), a cryptographic protocol added to Bitcoin with the Taproot upgrade.

Why FROST matters for developers:

  • Taproot-native: Deposit addresses are standard P2TR addresses. Any wallet that supports Taproot can send BTC to mint CBTC.
  • Indistinguishable on-chain: FROST signatures look identical to regular single-signature Bitcoin transactions. No one can tell from the blockchain that a threshold scheme is in use.
  • Smaller transactions, lower fees: Compared to traditional on-chain multisig, FROST produces a single aggregated signature regardless of how many Attestors participated.
  • No single point of failure: Even if some Attestors go offline, the system continues to operate as long as the threshold is met. For a full technical deep dive, see the Security Deep Dive page. For the original research, see the FROST whitepaper.

What You Can Build with Wrapped Bitcoin on Canton

Section titled “What You Can Build with Wrapped Bitcoin on Canton”

CBTC is a foundational layer for building institutional-grade financial products on Canton:

  • DeFi Protocols - DEXs, lending platforms, and liquidity pools using CBTC as collateral
  • Custody and Wallet Solutions - Institutional-grade wallets supporting CBTC and Canton-native assets
  • Structured Products - Yield-generating vaults, options strategies, and derivatives
  • Payment and Settlement - Instant, low-cost cross-border transactions
  • Trading Systems - Spot and perpetual trading with Canton’s privacy (no public mempool, no MEV)

Developer Resources

Section titled “Developer Resources”
Resource Description Link
cbtc-lib (Rust) SDK for minting, burning, sending, and receiving CBTC GitHub · Setup guide
canton-lib Lower-level Canton interaction library GitHub
CBTC DAR files Daml packages to install on your Canton participant GitHub
FROST Whitepaper Original threshold signature research ePrint
Canton Whitepaper Canton Network technical overview canton.network
Quantstamp Audit Security audit of CBTC smart contracts View Report
Data API Analytics and rewards API for institutional clients API Reference

Next Steps

Section titled “Next Steps”