American cryptocurrency exchange Coinbase announced on Thursday the launch of cbBTC (Coinbase Wrapped BTC), an ERC20 token backed 1:1 by Coinbase’s custodian Bitcoin, which is a wrapped version of Bitcoin. cbBTC initially supports the Ethereum blockchain and the Base network supported by Coinbase, and is expected to expand to other chains in the future.
Coinbase says that starting today, its customers can leverage the Bitcoin they already hold to seamlessly and securely access financial applications in the Ethereum ecosystem. cbBTC will be adopted by multiple decentralized finance (DeFi) platforms at launch, including decentralized exchanges Aerodrome and Curve, lending protocol Aave, and cross-chain protocol DeBridge.
Coinbase wrote in a post :
“cbBTC is designed to be seamlessly compatible with DeFi applications, so users can now invest in novel DeFi use cases, such as providing their Bitcoin as liquidity to DeFi protocols or as collateral to borrow other crypto assets.”
According to the official website information, when Coinbase users transfer their BTC from Coinbase to an address on Base or Ethereum, the BTC will automatically be converted to cbBTC at a 1:1 ratio. When a user receives cbBTC in their Coinbase account, the token will also be converted to BTC on a proportional basis. cbBTC will not have a separate order book or trading pair on Coinbase.
It should be noted that the sending and receiving functions of cbBTC are currently only available to Coinbase customers in the United States (except New York State), the United Kingdom, European Economic Area (EEA) countries, Singapore, Australia, and Brazil, but the token is available on Base and Ethereum. The chain will be open to users around the world, and users can purchase cbBTC through the Coinbase wallet or other supported third-party exchanges.
