- Coinbase launches cbBTC, an ERC20 token backed 1:1 with Bitcoin.
- cbBTC allows BTC holders to access DeFi apps like Aave, Compound, and MakerDAO.
- There are over 843,783 Bitcoins supporting cbBTC, which represents 4% of the total Bitcoin supply.
Coinbase, the largest cryptocurrency exchange in the United States, has officially launched a new tokenized product, Coinbase Wrapped Bitcoin (cbBTC), marking a major step forward for Bitcoin tokenization across the blockchain.
The newly launched ERC20 token is fully backed 1:1 by Coinbase’s Bitcoin holdings, allowing holders to interact with decentralized finance (DeFi) applications on Ethereum and Base. Coinbase plans to support more chains in the future.
The launch of cbBTC provides an innovative bridge between the DeFi ecosystems of Bitcoin and Ethereum, giving Bitcoin holders more ways to lend, borrow, and earn returns on their assets.
cbBTC is backed by Coinbase’s Bitcoin holdings.
Coinbase’s extensive Bitcoin holdings back the entire cbBTC supply.
Currently, Coinbase holds over 843,783 Bitcoins worth approximately $48.7 billion, representing over 4% of the total Bitcoin supply. This ensures strong liquidity for cbBTC holders.
The number of cbBTC tokens in circulation is directly limited by the amount of Bitcoin owned by Coinbase.
How does cbBTC work?
When a user transfers Bitcoin from Coinbase to a Base or Ethereum address, the BTC is automatically converted to cbBTC at a 1:1 ratio. This conversion happens seamlessly, and when cbBTC is sent back to the Coinbase account, the reverse process occurs, converting the wrapped asset back to Bitcoin.
Unlike a typical token launch, cbBTC will not have a separate order book or trading pair on Coinbase, but will be accessible on decentralized exchanges (DEXs) such as Aerodrome and Curve. Additionally, third-party exchanges may choose to list cbBTC in the future.
At launch, cbBTC will be available on Coinbase in Australia, Brazil, EEA countries, Singapore, the United Kingdom, and the United States (excluding New York State).
Expanding Accessibility to Decentralized Finance
The introduction of cbBTC is not just a technological advancement, but also part of Coinbase’s broader mission to expand access to decentralized finance.
Will Robinson, VP of Engineering at Coinbase, highlighted cbBTC’s potential to “bring a billion people on-chain.”
cbBTC increases the utility of Bitcoin by giving Bitcoin holders access to DeFi applications like Aave, Compound, and MakerDAO, helping users integrate BTC into the broader financial ecosystem.
As demand for Bitcoin-based DeFi products grows, cbBTC positions Coinbase as a leader in tokenization.
Notably, Coinbase’s move comes shortly after BitGo announced its custodial service for wBTC, making the wrapped Bitcoin market even more competitive.
With support from leading DeFi protocols, cbBTC can play a key role in shaping the future of decentralized finance.