Coinbase Launches Revolutionary Bitcoin Token cbBTC: What You Need to Know

The crypto revolution is here! Coinbase has just made a significant move by introducing a brand new Bitcoin token. This San Francisco-based cryptocurrency platform has launched Coinbase Wrapped Bitcoin (cbBTC), opening the doors to decentralized finance (DeFi) applications on Ethereum and Base using Bitcoin (BTC).

Coinbase first teased the release of cbBTC on August 14, during a wave of controversy surrounding BitGo. Today, the official unveiling has finally taken place.

As per the announcement on September 12, cbBTC is an ERC20 token backed 1:1 by Bitcoin, securely held in Coinbase’s custody. This new development aims to simplify access to DeFi for millions of Bitcoin holders.

Coinbase remarked: “Starting today, millions of Coinbase users can easily and securely access financial applications within the Ethereum ecosystem, utilizing the Bitcoin they already own.”

Coinbase’s Bitcoin Token: A New Era for Cryptocurrencies?

Indeed, Coinbase has announced that users can now engage in various financial activities, such as providing liquidity, using Bitcoin as collateral, and trading on decentralized exchanges (DEXs). The company aims to establish cbBTC as a reliable and secure choice in the crypto world.

According to Coinbase: “With cbBTC, we continue to expand economic freedom by providing users with more ways to utilize their Bitcoin.”

Will Robinson, Vice President of Engineering at Coinbase, shared his thoughts: “Coinbase is helping users do more with their Bitcoin. cbBTC is a major leap forward for DeFi, giving Bitcoin a much more active role.”

Features and Functionalities of Coinbase’s cbBTC

cbBTC doesn’t operate on a separate order book within Coinbase’s platform. Instead, Bitcoin is seamlessly converted to cbBTC when transferred to compatible networks, and vice versa. This provides users with flexibility and ease when managing their assets.

Moreover, cbBTC can be traded on decentralized platforms using Coinbase Wallet. Coinbase plans to extend cbBTC support to additional blockchains soon.

cbBTC is currently available in the UK, countries in the European Economic Area (EEA), Brazil, Australia, Singapore, and most U.S. states, with the exception of New York.

Coinbase’s official tweet revealed that cbBTC will soon be accessible across multiple protocols, including Aerodrome, Uniswap, Bend, Aave, Morpho, Compound, Moonwell, and others.

However, not everyone shares the same optimism. Justin Sun, the founder of TRON, has voiced concerns, labeling cbBTC as risky due to the lack of proper auditing and reserve backing. He stated: “Any subpoena from the U.S. government could lead to the confiscation of all your BTC. This is the closest representation of central bank Bitcoin we’ve seen. It’s a dark day for BTC.”

Final Thoughts

The introduction of cbBTC by Coinbase marks a new chapter in the cryptocurrency landscape. By bridging Bitcoin and Ethereum, Coinbase is providing users with unprecedented opportunities to use their Bitcoin in decentralized finance.

As Hal Finney, a pioneer in Bitcoin, once said: “Bitcoin is a remarkable cryptographic achievement, and the ability to create something that is not duplicable in the digital world has enormous value.” Coinbase’s cbBTC is a significant step towards realizing that value in new and exciting ways.