Coinbase has officially launched its wrapped Bitcoin token, cbBTC, on its layer-2 network, Base, and Ethereum mainnet, according to a Sept. 12 statement.
The new product comes around a month after Coinbase teased it on the social media platform X.
cbBTC
According to Coinbase, cbBTC is an ERC-20 token fully backed by Bitcoin and custodied on the platform. When users send BTC from Coinbase to Base or Ethereum, it automatically converts to cbBTC and vice versa.
Wrapped Bitcoin tokens allow users to leverage their BTC on other networks. So, the exchange noted that cbBTC aims to drive innovative financial applications and boost Bitcoin adoption in DeFi.
Already, several major DeFi protocols, including Aave, Morpho, Sky, Compound, Aerodrome, Curve, Veda, Mellow, and the real-world asset platform Maple, have already integrated cbBTC for their users.
Moreover, cbBTC is available via the Coinbase application in Singapore, the UK, the European Economic Area, Australia, Brazil, and the US (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 over 984,000 BTC, valued at approximately $57 billion. Meanwhile, most of this is held for exchange-traded fund issuers like BlackRock, who custody their ETF assets with the Brian Armstrong-led exchange.
WBTC troubles
Coinbase's launch of cbBTC comes at an interesting time as the dominant Wrapped Bitcoin token issued by BitGo WBTC faces challenges.
Over the past month, crypto users have sought alternatives to WBTC due to BitGo's new partnership with TRON founder Justin Sun. While the firm has tried to allay these worries, critics have pointed out that Sun's involvement poses a threat to the token due to his track record.
Due to this, several projects have been seeking to take advantage of the fallout to push a Bitcoin wrapper product.
Earlier this month, 21.co, the parent company of 21Shares, introduced its Wrapped Bitcoin product (21BTC) on the Ethereum blockchain. Prior to that, DeFi protocol Threshold has proposed merging its BTC “wrapper” token, tBTC, with WBTC in an effort to save the more popular BTC product.