Coinbase Launches Wrapped BTC (cbBTC) Token to Expand Bitcoin's Utility in DeFi Ecosystem

This move aims to expand Bitcoin's utility within the decentralized finance (DeFi) ecosystem.

Crypto exchange Coinbase (NASDAQ:COIN) unveiled the launch of Coinbase Wrapped BTC (cbBTC) on Thursday, an ERC20 token pegged 1:1 by Bitcoin (CRYPTO: BTC) held in Coinbase’s custody.

This move is designed to enhance Bitcoin’s utility within the decentralized finance (DeFi) ecosystem.

The rollout, which commenced today, initially supports the Base and Ethereum networks, with plans to expand to additional blockchains.

Coinbase users can now effortlessly access Ethereum-based DeFi applications using their existing Bitcoin holdings, thanks to cbBTC.

This integration aims to drive greater adoption and liquidity in the DeFi space.

cbBTC is designed to reduce friction in onchain Bitcoin usage, enabling new DeFi use cases like providing liquidity or using Bitcoin as collateral for borrowing other crypto assets.

The token will be integrated with major DeFi protocols at launch, including Aave, Compound, and Curve.

For Coinbase users, the process is streamlined: when sending BTC from Coinbase to an address on Base or Ethereum, it’s automatically converted 1:1 to cbBTC.

Conversely, when users receive cbBTC in their Coinbase accounts, it’s converted back to BTC at the same ratio.

However, the launch comes amid industry-wide discussions about the risks associated with wrapped Bitcoin products.

Recent controversies surrounding WBTC, another wrapped Bitcoin token, have raised concerns about centralization and control in such products.

Coinbase has not directly addressed these issues.

The introduction of cbBTC highlights the ongoing evolution of Bitcoin’s role in the broader cryptocurrency ecosystem, a topic likely to be discussed at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

The above is the detailed content of Coinbase Launches Wrapped BTC (cbBTC) Token to Expand Bitcoin's Utility in DeFi Ecosystem. For more information, please follow other related articles on the PHP Chinese website!