Coinbase has officially launched its wrapped Bitcoin token, cbBTC, on its layer 2 network, Base, and the Ethereum mainnet, according to a Sept. 12 release.
The new product comes about a month after Coinbase introduced it on social media platform X.
cbBTC
According to Coinbase, cbBTC is an ERC-20 token that is fully backed by Bitcoin and held on the platform. When users send BTC from Coinbase to Base or Ethereum, it is automatically converted to cbBTC and vice versa.
Wrapped Bitcoin tokens allow users to leverage their BTC on other networks. Thus, the exchange noted that cbBTC aims to foster innovative financial applications and boost Bitcoin adoption in DeFi.
Already, several major DeFi protocols, including AaveMorpho, Sky, Compound, Aerodrome, Curve, Veda, Mellow and the real-world asset platform Maple, have already integrated cbBTC for their users.
Additionally, cbBTC is available via the Coinbase app in Singapore, the United Kingdom, the European Economic Area, Australia, Brazil, and the United States (excluding New York State). The asset will also be accessible globally on Base and Ethereum.
Data from blockchain analytics firm Arkham Intelligence shows that Coinbase holds more than 984,000 BTC, valued at about $57 billion. Most of that is held by exchange-traded fund issuers like BlackRock, which keep their ETF assets with the exchange run by Brian Armstrong.
Problems with WBTC
Coinbase’s launch of cbBTC comes at an interesting time as BitGo’s dominant Wrapped Bitcoin token WBTC faces challenges.
Over the past month, cryptocurrency users have been looking for alternatives to WBTC due to BitGo’s new partnership with TRON founder Justin Sun. While the company has tried to allay these concerns, critics have pointed out that Sun’s involvement poses a threat to the token due to his track record.
As a result, several projects have sought to take advantage of the fallout from this crisis to offer a Bitcoin wrapper product.
Earlier this month, 21.co, the parent company of 21Shares, launched its Wrapped Bitcoin (21BTC) product on the Ethereum blockchain. Prior to that, DeFi protocol Threshold proposed merging its BTC “wrapper” token, tBTC, with WBTC in an effort to save the more popular BTC product.
