Coinbase has officially launched cbBTC, its new wrapped Bitcoin token, on both its Layer-2 network Base and the Ethereum blockchain. Designed to provide decentralized finance (DeFi) users with access to Bitcoin’s liquidity and price movements, cbBTC is fully backed by Bitcoin reserves, ensuring it maintains a 1:1 value peg with the original cryptocurrency.
Wrapped tokens are digital assets that represent another cryptocurrency on a different blockchain, maintaining parity with the value of the underlying asset. With cbBTC, DeFi users can engage in various activities such as yield farming, lending, borrowing, and liquidity provision using Bitcoin. Additionally, Coinbase has streamlined the process by enabling automatic conversion to cbBTC for users transferring Bitcoin from Coinbase to Base Layer 2 or Ethereum wallets.
Since its launch, cbBTC has been integrated into several prominent DeFi protocols on the Ethereum network, including Curve Finance, Aave, Sky Protocol, Aerodrome, Compound, Maple, Moonwell, and Morpho Labs, among others.
Currently, cbBTC is accessible to users in the UK, Australia, Singapore, and the US, with the exception of New York.
This launch follows recent controversies surrounding wBTC, a similar wrapped Bitcoin token. Criticism arose after BitGo, the issuer of wBTC, proposed transferring management to Bit Global. Concerns were particularly centered on the reputation of Bit Global’s co-founder, Justin Sun, who has pledged that no changes will be made to BitGo’s multi-signature technology and cold storage practices. The backlash led to discussions within the MakerDAO community about reducing debt limits for wBTC.
