Coinbase launches Bitcoin derived token for Ethereum network
2 min readCoinbase, the leading cryptocurrency trading platform in the United States, announced this Thursday (12/09) the launch of cbBTC. This is a token based on the ERC-20 technology of the Ethereum network and a “wrapped” version of Bitcoin.
This new digital asset is fully backed by Bitcoin, held in reserve by Coinbase itself.
cbBTC can be accessed on the Ethereum and Base networks, the latter being the layer 2 developed by Coinbase. The company has revealed plans to expand the token’s availability to other blockchain networks in the future.
According to Coinbase, the introduction of cbBTC aims to facilitate the integration of new users into the cryptocurrency universe, taking advantage of the familiarity and wide acceptance of Bitcoin.
With this new token, millions of Coinbase customers will be able to use their Bitcoins to interact with financial applications in the Ethereum ecosystem in a secure and simplified way.
Coinbase Expands cbBTC Support with New DeFi Partnerships
So-called Bitcoin “wrapped” tokens , such as cbBTC, are an innovative tool that allows users to maximize the value of their BTC holdings across different networks. These tokens are already quite popular in the decentralized finance (DeFi) space on the Ethereum network.
According to Coinbase, the main intention behind the development of cbBTC is to increase integration between different networks. This simplifies the transfer of assets and contributes to the construction of a more efficient and connected financial ecosystem.
Coinbase recently revealed a list of renowned DeFi protocols that already support cbBTC on both Ethereum and Base networks. Notable among these are lending protocols such as Aave, Morpho, Sky, and Compound.
Additionally, decentralized exchanges Aerodrome and Curve, as well as web3 lending platforms like Maple, and yield vaults including Veda and Mellow also support cbBTC.
Controversies in the backed token market
Furthermore, cbBTC is already accessible to platform users in several locations. These include the United Kingdom, the European Economic Area, Singapore, Australia, Brazil, and the United States, except for New York State.
This launch comes at a delicate time for the industry. There has been recent controversy surrounding Wrapped Bitcoin (WBTC), the main Bitcoin-backed token.
In a move that caused some unease in the market, BitGo, which manages WBTC, announced in August that it would transfer control of the token to a joint venture with BiT Global.
Additionally, the manager revealed plans for a collaboration with Justin Sun, founder of Tron, raising questions about future transparency in the administration of the token.
Wrapped Bitcoin, in turn, currently holds a market value of US$8.9 billion, which corresponds to 0.77% of Bitcoin’s total market cap, according to data from CoinGecko.
Meanwhile, Coinbase ‘s liquid staking token cbETH is currently the seventh-largest Ethereum staking token, with an estimated market cap of $492.3 million.
