Coinbase rolls out wrapped bitcoin alternative cbBTC on Ethereum and Base

Crypto exchange Coinbase has launched its own take on wrapped bitcoin, rolling out the cbBTC token on the Ethereum and Base networks from Thursday, after initially teasing the asset in August.

“As the oldest and most widely held crypto asset, bitcoin, plays an important role in onboarding users to crypto,” Coinbase said in a blog post announcing the launch. “By bringing assets across more chains, wrapped assets like cbBTC help build a more efficient, interconnected and expansive financial ecosystem.”

The ERC-20 token is backed 1:1 by bitcoin held at Coinbase to use in decentralized finance applications within the Ethereum and Base ecosystems, including providing bitcoin liquidity to DeFi protocols or using it as collateral to borrow other assets.

Dapps supporting cbBTC at launch include DEXs Aredrome and Curve, lending protocols Aave, Compound and Morpho, and cross-chain swaps platform DeBridge.

Coinbase said it is also working to expand native cbBTC support to additional chains.

How cbBTC works

Coinbase Wrapped BTC enables users to send their bitcoin from Coinbase to their on-chain addresses on Ethereum or Base, with the funds automatically converted 1:1 to cbBTC. Conversely, when users send on-chain cbBTC to their Coinbase accounts, it is converted back 1:1 to BTC.

The exchange noted that cbBTC will not have a separate order book or trading pair on Coinbase, but it will be available to trade on DEXs using its non-custodial web3 Coinbase Wallet.

While cbBTC can be sent or received on Ethereum or Base globally, the send and receive feature on Coinbase is initially restricted to users in the U.S. (excluding New York), UK, European Economic Area, Singapore, Australia and Brazil, the platform confirmed.

Coinbase Wrapped BTC is the latest expansion into bitcoin-related services for the firm, following its custodial offering for many of the U.S. spot Bitcoin exchange-traded funds that launched in January and rolling out support for the Bitcoin Layer 2 Lightning Network in April in collaboration with Lightspark.

Competing with WBTC

Coinbase’s cbBTC will compete with Wrapped Bitcoin ( WBTC +2.38% ) — currently the largest tokenized BTC product with a market cap of nearly $9 billion, according to The Block’s WBTC Price Page .

The launch comes after BitGo, the custodian of WBTC, announced a new partnership plan with Hong Kong-based BiT Global — linked to Tron founder Justin Sun — to manage WBTC custody in August.

BitGo said it will become a minority owner in a joint venture with BiT Global, aiming to offer “multi-jurisdictional and multi-institutional custody” for the WBTC business. However, the development raised security concerns in the crypto community, influenced by Sun’s controversial reputation and the potential centralization of control.

Consequently, Sky’s risk team (formerly MakerDAO), Block Analitica Labs, proposed halting new borrowing against WBTC collateral. In the WBTC plan’s defense, BitGo CEO Mike Belshe emphasized the firm’s commitment to security and the legal oversight of BitGo and BiT Global.