With limited details, many are questioning whether the wrapped cbBTC will be on Coinbase’s Ethereum Layer 2 Base blockchain.
- Coinbase’s major competitor, Binance, already has a wrapped BTC called BTCB on its BNB Chain.
- The exchange is set to earn whenever the wrapped tokens are minted, redeemed, or transferred.
- As a custodian for most spot Bitcoin ETFs, providing wrapped BTC would allow traders and institutions more flexibility and DeFi access.
Coinbase has recently hinted at the launch of its own wrapped Bitcoin, potentially called “cbBTC,” though specific details remain under wraps.
As of August 11, data from CryptoQuant shows that Coinbase Advance held approximately 850,000 BTC, while Coinbase Prime had just over 3,000 BTC. Stay tuned for more updates on this anticipated release.
This decision follows BitGo’s recent move to diversify the custodial jurisdictions and locations for the Bitcoin backing its wrapped Bitcoin, the wBTC. Previously, BitGo held the Bitcoin reserves exclusively in the U.S. However, they plan to expand and store these assets in additional locations, including Singapore and Hong Kong.
This move coincides with Marathon Digital’s recent initiative to stamp all Bitcoin blocks minted in the U.S. with a “Made in USA” label, highlighting the domestic origin of their mining operations.
Why Coinbase Could be Creating Its Wrapped BTC
Wrapped BTC could offer Coinbase a new revenue stream, with the exchange earning fees each time these tokens are minted, redeemed, or transferred. Additionally, it enables Coinbase to control and ensure sufficient liquidity, supporting a wide range of use cases across its platform.
As the custodian for most spot Bitcoin ETFs, Coinbase has access to a substantial pool of Bitcoin held within its platform. Introducing a wrapped Bitcoin could provide added flexibility for traders and institutions, streamlining access and providing the ability to engage in DeFi activities.
Like Binance offers BTCB on the BNB Chain, Coinbase could introduce its official wrapped Bitcoin on Base, Coinbase’s Ethereum Layer 2 network. However, since Base operates as a Layer 2 solution on Ethereum, wrapped assets like WBTC, WETH, and other ERC-20 tokens are already available and widely used on the blockchain.
It remains unknown where and when Coinbase will launch the cbBTC.
