Coinbase Unleashes cbBTC: Expanding Bitcoin’s Role in DeFi and Beyond

12. Sep 2024 Posted by Laurent C. on News

As the pioneering cryptocurrency, Bitcoin has long served as the gateway for millions to enter the world of crypto. Coinbase, a leader in the crypto space, is pushing the boundaries of Bitcoin’s utility, starting with its integration of the Lightning Network to facilitate instant, low-cost payments. Now, Coinbase is taking it further with the launch of cbBTC, empowering its users to unlock new opportunities in decentralized finance (DeFi) using the Bitcoin they already hold.

Unlocking DeFi with cbBTC

Coinbase's latest innovation, cbBTC, is a trusted, 1:1 wrapped version of Bitcoin, securely backed by BTC held in custody by Coinbase, which boasts over a decade of proven experience in safeguarding billions in Bitcoin. cbBTC seamlessly links off-chain Bitcoin liquidity with the fast, low-cost financial rails of Base and Ethereum, giving Bitcoin holders access to a deep pool of liquidity within the DeFi ecosystem.

By bridging Bitcoin to more chains, Coinbase is setting the stage for a more interconnected and efficient global financial system, leveraging the power of wrapped assets like cbBTC.

Empowering Bitcoin Holders Onchain

cbBTC removes traditional barriers, enabling users to leverage their existing Bitcoin holdings in the DeFi space. For the first time, Coinbase customers can tap into a wide range of DeFi opportunities, such as providing Bitcoin liquidity to DeFi protocols or using Bitcoin as collateral to borrow other crypto assets. At launch, popular DeFi platforms like Aerodrome, Curve, Aave, Compound, and more will support cbBTC, enhancing its versatility across decentralized exchanges, lending apps, and yield vaults.

The Next Frontier: How cbBTC Works

The process of using cbBTC is designed to be seamless. When users send their BTC from Coinbase to an address on Base or Ethereum, their BTC will be automatically converted 1:1 to cbBTC. Similarly, when receiving cbBTC, it will be converted back to BTC in their Coinbase account. Notably, cbBTC will not have a separate order book or trading pair on Coinbase but will be available for trading on decentralized exchanges (DEXs) via Coinbase Wallet, as well as potentially other third-party exchanges that choose to support it.

cbBTC will initially be available to users in the US (except New York), the UK, EEA, Singapore, Australia, and Brazil, and globally on Base and Ethereum.

Charting the Future of Finance

The launch of cbBTC marks a significant milestone in the evolution of Bitcoin’s role in decentralized finance. Coinbase is paving the way for innovative financial applications, further adoption of Bitcoin in DeFi, and a future where financial services are more inclusive and accessible. With cbBTC, the journey towards bringing 1 billion people onchain is well underway.

Smart Contract Addresses

  • Base: 0xcbb7c0000ab88b473b1f5afd9ef808440eed33bf
  • Ethereum: 0xcbb7c0000ab88b473b1f5afd9ef808440eed33bf

Coinbase continues to lead the way in transforming how Bitcoin interacts with the broader crypto ecosystem. The introduction of cbBTC is just the beginning, signaling a new era of financial utility and growth for Bitcoin holders worldwide.