Newly Launched cbBTC by Coinbase: Wrapped Bitcoin Now Available
Coinbase has recently launched its own version of wrapped bitcoin, known as cbBTC, on the Ethereum and Base networks, offering users the opportunity to engage with bitcoin in various decentralized finance (DeFi) applications.
cbBTC is now supported by a range of DeFi services for trading, lending, and as collateral. It features automatic conversion capabilities for Coinbase users transferring bitcoin to or from these networks.
This move by Coinbase comes after the company hinted at entering the wrapped bitcoin market, aiming to compete with the current leader, BitGo’s WBTC. Coinbase has ambitious plans to cultivate a substantial bitcoin economy on the Base network.
A tokenized iteration of bitcoin (BTC) known as Coinbase Wrapped BTC (cbBTC) has been introduced by Coinbase, backed on a 1:1 basis with bitcoin held by the exchange. These wrapped tokens enable users to leverage their existing bitcoin in novel ways onchain, such as providing liquidity to DeFi protocols or using it as collateral for borrowing other cryptocurrencies.
Several DeFi services are set to extend support for cbBTC, including exchanges like Aerodrome and Curve, lending platforms such as Aave and Compound, real-world assets provider Maple, and cross-chain bridges like deBridge.
When Coinbase users send bitcoin from the exchange to specific addresses on Base or Ethereum, the currency will automatically convert 1:1 to cbBTC. Similarly, when users receive cbBTC in their Coinbase accounts, it will convert back 1:1 from cbBTC to BTC.
Initially, cbBTC will be accessible to Coinbase users in the U.S. (excluding New York State), the U.K., EEA states, Singapore, Australia, and Brazil.
The introduction of this token comes shortly after Coinbase teased an upcoming announcement, amidst the backdrop of controversy surrounding BitGo’s WBTC token, which holds a dominant position in the wrapped bitcoin sector with a value exceeding $8 billion.
Jesse Pollak, the creator of Base, previously mentioned plans to establish a substantial bitcoin economy on the network, indicating a strategic vision for the future of the platform.
