Coinbase Launches cbBTC: Wrapped Bitcoin on Ethereum, Base
Coinbase, one of many main cryptocurrency exchanges, has formally unveiled its wrapped Bitcoin token, cbBTC, accessible on Ethereum and Base.
Introduced on September 12, cbBTC is tied to Bitcoin with a 1:1 backing, which means every cbBTC token is totally collateralized by an equal quantity of Bitcoin held by Coinbase.
It will not have its personal buying and selling pairs or order books on Coinbase.
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The mechanics behind this wrapped Bitcoin are easy: customers can mint cbBTC by sending Bitcoin to an Ethereum or Base tackle. The method works in reverse as properly—when cbBTC is shipped to a Coinbase tackle, it’s routinely redeemed for conventional Bitcoin.
The aim of tokenizing Bitcoin is to open up decentralized finance (DeFi) functionalities for the cryptocurrency, which is commonly seen as restricted on this house. For instance, with cbBTC, individuals can use their Bitcoin as collateral for loans or lend it to earn curiosity.
At launch, cbBTC will probably be built-in with a number of DeFi platforms similar to Aave, Compound Finance, Morpho, Spark, and Moonwell, amongst others. Coinbase is eyeing future expansions to further blockchains and ecosystems; nonetheless, no particular timelines or particulars had been supplied within the preliminary announcement.
This transfer represents one other step towards growing Bitcoin’s presence within the DeFi house, offering extra methods for customers to make the most of their Bitcoin holdings.
In different information, Coinbase is going through a lawsuit from the US Securities and Alternate Fee, which accused the crypto trade of breaking federal securities legal guidelines. Just lately, Coinbase requested to overview SEC Chair Gary Gensler’s non-public emails, a transfer the SEC is pushing again towards.
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