Coinbase’s Wrapped Bitcoin cbBTC Goes Live

As a seasoned crypto investor with a knack for spotting promising opportunities, I find Coinbase’s entry into the wrapped bitcoin market with cbBTC quite intriguing. Having closely followed the growth of DeFi and the dominance of BitGo’s WBTC, it’s clear that this is a move aimed at shaking up the status quo.Now available for use, a Bitcoin (BTC) equivalent issued by Coinbase (COIN), operates on both the Ethereum and Binance Smart Chain networks. This move by the cryptocurrency trading platform places it in a market that boasts a leading player with over $8 billion in assets backing it.

The cbBTC token issued by Coinbase operates similarly to traditional BTC but functions as an Ethereum-based ERC-20 token. This is because each cbBTC represents a single unit of the actual bitcoin that’s kept safe by Coinbase. By using these wrapped tokens, users can leverage their existing bitcoins in various on-chain applications, such as supplying bitcoin to decentralized finance (DeFi) platforms for liquidity, or using it as collateral when borrowing other cryptocurrencies.

Starting this Thursday, a number of DeFi platforms are anticipated to integrate support for cbBTC, according to Coinbase. Among these platforms are exchanges like Aerodrome and Curve, lending applications including Aave, Sky Protocol, Compound, asset providers such as Maple, and cross-chain bridges like deBridge, along with several others.

Users who transfer Bitcoin (BTC) from their Coinbase account to specific addresses on Blockchain (Base) or Ethereum will instantly receive an equivalent amount of cbBTC. When users receive cbBTC in their Coinbase accounts, it will be automatically converted into an equal amount of BTC.

Initially, cbBTC will be accessible to Coinbase users residing in the United States (with exceptions for New York State), United Kingdom, European Economic Area countries, Singapore, Australia, and Brazil.

The token comes weeks after Coinbase first teased an announcement amid controversy around BitGo’s wrapped bitcoin (WBTC) token – which leads the wrapped bitcoin category and is worth over $8 billion as of Thursday.