Coinbase Hints to Launch Wrapped Staked BTC ‘cbBTC’ on Base Chain

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Sujha Sundararajan

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Sujha Sundararajan

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August 14, 2024 02:10 EDT

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In a Tweet, early Wednesday, Coinbase wrote that it would soon launch “cbBTC,” which is supposed to be a competitor of Wrapped Bitcoin (WBTC). In a latest update, Coinbase has pre-launched registration portal for cbBTC, which can be registered using various wallets.

The largest crypto exchange would build “Bitcoin economic system on the Base network,” wrote journalist and blockchain blogger Colin Wu.

“WBTC has caused community concerns due to the involvement of Justin Sun recently. cbBTC is suspected to be a competitor of WBTC.”

Justin Sun, the Tron founder, has recently addressed the increasing concerns regarding his connection with Wrapped Bitcoin. The crypto community has been on a heated debate over Sun’s involvement in the custody operations of WBTC.

In a latest statement, he elucidated his role and the security protocols dealing with WBTC. This came after BitGo announced transitioning of WBTC business to multi-institutional custody.

Besides, MakerDAO’s risk management unit BA Labs proposed offboarding WBTC. On the other hand, Aave’s risk division Chaos Labs is slowly deciding on hot to treat WBTC.

Following Coinbase’s ‘cbBTC’ post, Jesse Pollak head of Coinbase’s Base network, expressed her love for Bitcoin.

“We’re going to build a massive bitcoin economy on Base,” Pollak wrote.

According to some speculators, the announcement of cbBTC could refer to Coinbase’s own wrapped Bitcoin product, which would potentially be launched on the Layer-2 chain Base.

One speculator wrote on X, “cbBTC just means more collateral for DeFi on ETH.”

Coinbase’s cbBTC Plans

Coinbase had previously announced Wrapped Staked ETH (cbETH), which represents staked Ethereum (ETH) in a tradable form.

“cbETH provides flexibility to sell, transfer, or use it,” the exchange noted. Also, there is no fees for wrapping staked ETH. The cbBTC could reflect a similar note when launched.

Further, if Coinbase intends to launch cbBTC on Base chain, it would probably come with benefits including lower fees to mint and redeem tokens and push increased usage of WBTC.