Coinbase has launched its wrapped Bitcoin token, cbBTC, on its layer-2 network, Base, and Ethereum mainnet. The new product is an ERC-20 token fully backed by Bitcoin and custodied on the platform. By converting BTC to cbBTC, users can leverage their BTC on other networks, driving innovative financial applications and boosting Bitcoin adoption in DeFi.
Several major DeFi protocols have already integrated cbBTC, including Aave, Compound, and Curve. cbBTC is available on the Coinbase application in several countries and will be globally accessible on Base and Ethereum. Coinbase holds over 984,000 BTC, valued at approximately $57 billion, with most held for exchange-traded fund issuers.
The launch of cbBTC comes at a time when the dominant Wrapped Bitcoin token issued by BitGo, WBTC, faces challenges due to a partnership with TRON founder Justin Sun. Criticisms have been raised regarding Sun’s involvement in WBTC, leading to some projects seeking alternatives. 21.co, the parent company of 21Shares, has introduced its Wrapped Bitcoin product, 21BTC, on the Ethereum blockchain, while DeFi protocol Threshold has proposed merging its BTC “wrapper” token, tBTC, with WBTC.
In conclusion, Coinbase’s launch of cbBTC provides users with a new option to leverage their BTC on other networks and participate in the growing DeFi ecosystem. With several major protocols already integrating cbBTC, the new token has the potential to drive more adoption of Bitcoin within decentralized finance. As alternatives to WBTC emerge, it will be interesting to see how the competition in the wrapped Bitcoin space unfolds and which product gains the most traction in the market.
