Coinbase Introduces Wrapped Bitcoin (cbBTC) on Ethereum and Base Networks

Coinbase Launches Wrapped Bitcoin Token on Ethereum and Base Networks

A new tokenized version of Bitcoin (BTC), known as Coinbase Wrapped BTC (cbBTC), has officially launched on both the Ethereum and Base networks. This innovative offering from the renowned crypto exchange Coinbase (COIN) enters a competitive market, currently dominated by BitGo’s wrapped Bitcoin (WBTC) token, which boasts backing of over $8 billion in assets.

cbBTC is an ERC-20 token that is fully backed on a 1:1 basis by Bitcoin (BTC) held securely by Coinbase. Wrapped tokens like cbBTC provide users with unique opportunities to utilize their existing Bitcoin holdings in various ways on-chain. For instance, traders can offer their Bitcoin as liquidity to decentralized finance (DeFi) protocols or use it as collateral to borrow other cryptocurrencies.

Coinbase has announced that several prominent DeFi services will support cbBTC starting Thursday. These include:

• Aerodrome
• Curve
• Aave
• Sky Protocol
• Compound
• Maple, a provider of real-world assets
• Cross-chain bridges like deBridge

When Coinbase users send Bitcoin from the exchange to designated addresses on either the Base or Ethereum networks, their assets will be automatically converted to cbBTC at a 1:1 ratio. Upon receiving cbBTC in their Coinbase accounts, users can convert it back to BTC at the same rate, ensuring a seamless experience.

At the time of its launch, cbBTC will be accessible to Coinbase users located in the United States (with the exception of New York State), the United Kingdom, European Economic Area (EEA) states, Singapore, Australia, and Brazil.

This launch comes just weeks after Coinbase hinted at the announcement amid ongoing discussions surrounding BitGo’s WBTC token, which leads the wrapped Bitcoin sector. Jesse Pollak, the creator of Base, previously mentioned the team’s ambition to establish a “massive Bitcoin economy” on the network.