Coinbase, the leading U.S. cryptocurrency exchange, has introduced Coinbase Wrapped Bitcoin (cbBTC), an ERC-20 token backed 1:1 by Bitcoin held in its custody. This innovation marks a pivotal step in Bitcoin’s cross-chain tokenization, enabling BTC holders to access decentralized finance (DeFi) ecosystems on Ethereum and Base.
Key Highlights of cbBTC
- Full Bitcoin Backing: Each cbBTC is fully collateralized by Bitcoin held in Coinbase’s reserves, ensuring transparency and trust.
- DeFi Integration: Seamlessly interact with platforms like Aave, Compound, and MakerDAO to lend, borrow, or earn yield on Bitcoin assets.
- Scalable Liquidity: Supported by 843,783 BTC (worth ~$48.7 billion) held by Coinbase—over 4% of Bitcoin’s total supply.
How cbBTC Works
- Conversion: Users transferring BTC from Coinbase to Base/Ethereum addresses automatically receive cbBTC at a 1:1 ratio.
- Redemption: Sending cbBTC back to Coinbase converts it to native BTC.
- Trading: Available on DEXs like Aerodrome and Curve, with potential future listings on third-party exchanges.
👉 Explore DeFi opportunities with cbBTC
Why cbBTC Matters
Expanding DeFi Accessibility
cbBTC aligns with Coinbase’s mission to onboard millions to on-chain finance. By unlocking Bitcoin’s utility in DeFi, it bridges the gap between BTC’s store-of-value properties and Ethereum’s programmable ecosystem.
Competitive Edge
Launched shortly after BitGo’s wBTC custody announcement, cbBTC intensifies competition in the Bitcoin tokenization space, positioning Coinbase as a leader in institutional-grade wrapped assets.
FAQs
1. Is cbBTC safe to use?
Yes. Every cbBTC is 100% backed by Bitcoin held in Coinbase’s audited reserves, ensuring full redeemability.
2. Where can I trade cbBTC?
Initially on DEXs (e.g., Aerodrome). Centralized exchanges may list it later.
3. How does cbBTC differ from wBTC?
While both are Bitcoin-backed ERC-20 tokens, cbBTC is issued by Coinbase, leveraging its custodial infrastructure for institutional liquidity.
👉 Learn more about Bitcoin tokenization
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