Coinbase Teases New ‘cbBTC’ as Wrapped Bitcoin Alternative
Coinbase’s X account recently made a mysterious post that sparked rumors about the exchange’s potential development of a new product to rival Wrapped Bitcoin (WBTC).
The post simply stated “cbBTC,” which was followed by a cryptic message of “coming soon” a few hours later. Speculation intensified when Coinbase’s layer 2 network Base’s official X account commented with a single word, “based,” hinting at a possible plan to introduce its own version of WBTC on Base. Shortly after, Jesse Pollak, the creator of the layer 2 network, seemed to confirm this plan by expressing his admiration for Bitcoin and emphasizing the intention to establish a significant Bitcoin economy on Base.
If Coinbase proceeds with launching cbBTC on Base, it could potentially offer advantages such as reduced fees for minting and redeeming tokens, as well as attracting more users who trust the Coinbase brand, thereby boosting the usage of wrapped Bitcoin tokens.
The emergence of a potential alternative to WBTC comes at an intriguing time, especially amidst the controversy surrounding one of WBTC’s key custodians, BitGo, and its decision to relocate custody operations from the US to Hong Kong and Singapore.
Currently, there are approximately 154,000 WBTC tokens on the Ethereum network, valued at over $9 billion. Leading DeFi lending platforms like MakerDAO and Aave hold a substantial amount of WBTC as collateral and have initiated discussions on governance strategies in response to BitGo’s custody changes.
MakerDAO’s risk management unit, BA Labs, has suggested offboarding WBTC, while Aave’s risk unit, Chaos Labs, appears to be leaning towards a more cautious approach to monitor the situation.
Luke Youngblood, a founding contributor to Moonwell and a former developer of Ethereum staking at Coinbase, highlighted the unexpected turn of events for BitGo, stating that the company’s swift decline from a dominant player in the BTC derivative market to a vulnerable position was unforeseen just a week ago.
The timeline for the launch of cbBTC remains uncertain, but the recent developments involving BitGo losing its foothold in the tokenized Bitcoin market have surprised many observers.
