TL;DR
- Coinbase has launched cbBTC, a new version of Wrapped Bitcoin available on Ethereum and Base since September 12, 2024.
- cbBTC is an ERC-20 token backed 1:1 by Bitcoin and will be compatible with DEXs like Aerodrome and Curve, as well as lending protocols like Aave and Compound.
- Although it will not have a specific trading pair on the exchange, it will be available on DEXs through the exchange’s web3 wallet.
Coinbase has introduced a new version of Wrapped Bitcoin, called cbBTC, available on the Ethereum and Base networks from September 12, 2024. This new addition to the exchange’s DeFi ecosystem follows the token’s announcement in August and aims to enhance the interoperability of BTC with DeFi applications.
cbBTC is an ERC-20 token backed 1:1 by Bitcoin held in custody by Coinbase. This token will enable users on Ethereum and Base to utilize BTC in various DeFi applications, including lending protocols and DEXs. At launch, it will be compatible with DEXs such as Aerodrome and Curve, as well as lending protocols like Aave, Compound, and Morpho, and the cross-chain platform DeBridge.
The process of converting Bitcoin to cbBTC is straightforward: users can transfer BTC from Coinbase to their addresses on Ethereum or Base, where it will be automatically converted 1:1 to cbBTC. Conversely, when cbBTC is sent back to the exchange, it will be converted back 1:1 to BTC. Although cbBTC will not have a specific order book or trading pair on Coinbase, it will be available for trading on DEXs using the exchange’s non-custodial web3 wallet.
Coinbase Will Compete Directly with WBTC
Initially, the send and receive feature for cbBTC on the exchange will be limited to users in the U.S. (excluding New York), the UK, the European Economic Area, Singapore, Australia, and Brazil. The company aims to improve connectivity and efficiency in the financial ecosystem.
Moreover, cbBTC will compete directly with Wrapped Bitcoin (WBTC), the leading tokenized BTC product with a market capitalization close to $9 billion. Meanwhile, BitGo’s recent partnership with BiT Global for WBTC custody has raised concerns about security and centralization, which increases interest in Coinbase’s new offering.
