TL;DR
- Coinbase Announces cbBTC: Coinbase teased the launch of a new tokenized Bitcoin product, cbBTC, aimed at competing with Wrapped Bitcoin (WBTC). A registration portal for cbBTC is already live.
- Building on Base Network: Coinbase plans to create a Bitcoin economic system on its Base network, addressing community concerns over WBTC and Justin Sun’s involvement.
- Community Buzz and Speculations: The crypto community is speculating that cbBTC could be Coinbase’s own wrapped Bitcoin product, potentially offering lower fees and increased DeFi collateral on Ethereum and Layer 2 chains.
In a tweet early Wednesday, Coinbase announced its upcoming launch of “cbBTC,” a new tokenized Bitcoin product expected to rival Wrapped Bitcoin (WBTC). The exchange has already pre-launched a registration portal for cbBTC, allowing users to register using various wallets.
cbBTC.
— Coinbase 🛡️ (@coinbase) August 13, 2024
Coinbase aims to build a “Bitcoin economic system on the Base network,” according to journalist and blockchain blogger Colin Wu. This move comes amid community concerns over WBTC, particularly due to the involvement of Tron founder Justin Sun.
Sun has recently addressed these concerns, explaining his role and the security protocols in place for WBTC. This follows BitGo’s announcement of transitioning WBTC business to multi-institutional custody.
Community Reactions and Speculations
The crypto community has been abuzz with speculation about cbBTC. Jesse Pollak, head of Coinbase’s Base network, expressed enthusiasm for Bitcoin, stating, “We’re going to build a massive Bitcoin economy on Base.”
Some speculators believe cbBTC could be Coinbase’s own wrapped Bitcoin product, potentially launched on the Layer-2 chain Base. One user on X speculated, “cbBTC just means more collateral for DeFi on ETH.”
Coinbase’s cbBTC Plans
Coinbase has introduced Wrapped Staked ETH (cbETH), which allows users to trade staked Ethereum in a more accessible format. The exchange noted that cbETH provides flexibility to sell, transfer, or use it without fees for wrapping staked ETH.
The cbBTC might provide comparable advantages, such as reduced costs for minting and redeeming tokens, along with a boost in the utilization of WBTC. When cbBTC goes live, it will compete with BitGo’s Wrapped Bitcoin (WBTC), currently the largest tokenized BTC product with a market cap of over $9 billion.
This development coincides with BitGo’s partnership with BiT Global, linked to Justin Sun, to manage WBTC custody. This partnership has raised security concerns due to Sun’s controversial reputation and potential centralization of control.
Future Implications
Coinbase’s cbBTC could allow for holding Bitcoin on Ethereum and Layer 2 chains, acting as a source of liquidity for users and within Base, the blockchain incubated by Coinbase. As the launch approaches, the crypto community eagerly awaits further details on this potentially revolutionary product.
