Coinbase's Exciting New Token: What You Need to Know About cbBTC!

Coinbase Unveils Plans for cbBTC

“We’re going to build a massive Bitcoin economy on Base,” proclaimed Jesse Pollak, creator of Base, in a recent announcement.

Coinbase has teased the launch of a new token named cbBTC, sparking speculation about a potential alternative to Wrapped Bitcoin (WBTC). In a post on its X account, Coinbase hinted at this development, stating simply, “cbBTC” followed by “Coming soon.”

A comment from Base's official X account, stating “based,” further fueled theories that Coinbase intends to roll out this new token on its layer 2 network, Base. Pollak confirmed the enthusiasm for Bitcoin, expressing gratitude for its role in launching the crypto movement.

If launched, cbBTC could offer lower fees for minting and redeeming tokens, potentially increasing the usage of wrapped Bitcoin and attracting more users who trust the Coinbase brand.

This move comes at a pivotal time, as WBTC faces controversy due to its primary custodian, BitGo, planning to shift custody operations from the U.S. to Hong Kong and Singapore. Currently, there are about 154,000 WBTC on Ethereum, valued at over $9 billion. Major DeFi protocols like MakerDAO and Aave are engaged in governance discussions regarding the future of WBTC amidst these custody changes.

MakerDAO’s risk management unit has proposed offboarding WBTC, while Aave appears to be taking a more cautious approach.

Luke Youngblood, a founding contributor to Moonwell, remarked on the significant market shift, stating, “This week may mark the turning point when BitGo went from being the market dominant BTC derivative to a very rapid decline.”

The exact launch date for cbBTC remains uncertain, but the rapid developments surrounding BitGo and the tokenized Bitcoin market have taken many by surprise.