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HomeCrypto NewsMarketCoinbase Moves to Onboard Millions of Bitcoin Holders into DeFi with cbBTC on Base

Coinbase Moves to Onboard Millions of Bitcoin Holders into DeFi with cbBTC on Base

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Today, Coinbase has launched Coinbase Wrapped Bitcoin (cbBTC), an ERC-20 token backed 1:1 by Bitcoin (BTC). 

The prominent U.S. exchange confirmed the launch via an official press statement today and its verified social media handles.

The move opens new doors for millions of Bitcoin holders to access decentralized finance (DeFi) applications on Ethereum and the Base blockchain. It marks a significant leap toward increasing Bitcoin’s utility and driving further adoption in the DeFi ecosystem.

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Bitcoin’s New Role in DeFi

Bitcoin, traditionally viewed as a store of value, can now be used for lending, borrowing, and liquidity provision across multiple DeFi protocols. At launch, cbBTC will be supported on popular DeFi platforms like Aave, Compound, Curve, and Aerodrome.

Coinbase noted in its press release that the introduction of cbBTC “removes a key point of friction” for Bitcoin holders who want to participate in DeFi.

With cbBTC, Coinbase seeks to bridge the gap between the liquidity of Bitcoin and the high-speed, low-cost capabilities of Base and Ethereum. Users can now leverage their Bitcoin on these blockchains without selling or converting to other assets.

Essentially, users can explore new financial opportunities without leaving their existing assets behind.

How the New cbBTC Works

Notably, when BTC is sent from Coinbase to an Ethereum or Base address, it converts 1:1 to cbBTC. Conversely, cbBTC received in Coinbase accounts reverts to BTC at the same ratio. 

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Coinbase has stated that cbBTC won’t have its own order book or trading pair on the exchange. However, it can be traded on decentralized exchanges via Coinbase Wallet and potentially on other third-party platforms. 

Unlike some other wrapped assets, cbBTC is backed by Bitcoin held directly by Coinbase. The U.S.-based exchange prides itself on having over a decade of experience securely managing billions in Bitcoin for institutions and individuals. 

Following this launch, cbBTC transfers will be available in the UK, U.S. (excluding New York), EEA, Australia, Singapore, and Brazil. Meanwhile, the token is globally accessible on Ethereum and Base networks.

Initially available on Ethereum and Base, cbBTC will soon expand to other blockchains, according to Coinbase. Moreover, the company has disclosed intentions to create a more interconnected and expansive financial ecosystem.

“cbBTC is moving money forward. We’re one step closer to bringing 1 billion people on-chain,” Coinbase stated.

Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Abdulkarim Abdulwahab
Abdulkarim Abdulwahabhttp://thecryptobasic.com
Abdulkarim Abdulwahab is a seasoned crypto journalist who has established himself as a trusted voice in the world of blockchain and Web3. His extensive knowledge of the crypto space enables him to break down complex concepts into accessible language.

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