Coinbase is rolling out cbBTC — Coinbase Wrapped BTC — an ERC20 token backed 1:1 by Bitcoin, which Coinbase holds.
According to a press release shared with crypto.news, the cbBTC token is now available on Base and Ethereum (ETH).
Wrapped Bitcoin is a tokenized version of Bitcoin (BTC) that runs on Ethereum or other blockchains, giving BTC holders access to DeFi applications. Coinbase’s cbBTC is the latest addition to the wrapped asset category, following the likes of WBTC (WBTC).
In August, Coinbase posted a cryptic tweet about a new wrapped Bitcoin product. The news was announced on Coinbase’s official X account with a simple “cbBTC” followed by a “coming soon” comment.
Then, on Sept. 11, the Base X account tweeted a logo that was assumed to be the logo for the cbBTC.
pic.twitter.com/Mg5Sw1B2zg
— Base (@base) September 11, 2024
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Details of cbBTC
Coinbase users can now convert their Bitcoin to cbBTC when transferring from their accounts to Base or Ethereum addresses. This token can be used in popular DeFi protocols like Aave (AAVE), Compound (COMP), and MakerDAO, allowing users to lend, borrow, and earn yields with their Bitcoin.
CbBTC also ensures secure liquidity by being fully backed by Bitcoin held in Coinbase custody, which has a track record of over 10 years. This move aims to provide more utility for Bitcoin holders, allowing them to access decentralized finance applications using the Bitcoin they already own.
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How cbBTC works
When sending BTC from Coinbase to an address on Base or Ethereum, it will be automatically converted 1:1 to cbBTC. When receiving cbBTC in the Coinbase account, it will be converted 1:1 from cbBTC to BTC.
CbBTC will not have a separate order book or trading pair on Coinbase. However, it will be available to trade on DEXs using Coinbase Wallet and may be listed on other third-party exchanges that choose to support it.
At launch, cbBTC send and receive will be available on Coinbase in the U.S. (excluding New York State), the UK, EEA states, Singapore, Australia, and Brazil. It will also be accessible globally on Base and Ethereum.
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