Coinbase, one of many main cryptocurrency exchanges, has formally unveiled its wrapped Bitcoin token, cbBTC, out there on Ethereum and Base.
Introduced on September 12, cbBTC is tied to Bitcoin with a 1:1 backing, which means every cbBTC token is totally collateralized by an equal quantity of Bitcoin held by Coinbase.
It will not have its personal buying and selling pairs or order books on Coinbase.
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The mechanics behind this wrapped Bitcoin are easy: customers can mint cbBTC by sending Bitcoin to an Ethereum or Base deal with. The method works in reverse as effectively—when cbBTC is shipped to a Coinbase deal with, it’s routinely redeemed for conventional Bitcoin.
The aim of tokenizing Bitcoin is to open up decentralized finance (DeFi) functionalities for the cryptocurrency, which is usually seen as restricted on this area. For instance, with cbBTC, folks can use their Bitcoin as collateral for loans or lend it to earn curiosity.
At launch, cbBTC will likely be built-in with a number of DeFi platforms akin to Aave, Compound Finance, Morpho, Spark, and Moonwell, amongst others. Coinbase is eyeing future expansions to extra blockchains and ecosystems; nevertheless, no particular timelines or particulars had been offered within the preliminary announcement.
This transfer represents one other step towards rising Bitcoin’s presence within the DeFi area, offering extra methods for customers to make the most of their Bitcoin holdings.
In different information, Coinbase is dealing with a lawsuit from the US Securities and Change Fee, which accused the crypto change of breaking federal securities legal guidelines. Lately, Coinbase requested to overview SEC Chair Gary Gensler’s non-public emails, a transfer the SEC is pushing again in opposition to.
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