After hinting at a new wrapped Bitcoin product called “cbBTC,” Coinbase has stirred up the cryptocurrency market.
The announcement was made on August 14th, via Coinbase’s official X account. The post merely said “cbBTC” and included a “coming soon” remark.
In a later article, Jesse Pollak, the head of Coinbase’s layer-2 network Base, expressed his passion for Bitcoin and hinted at creating a “massive Bitcoin economy on the L2 network,” fueling more rumors.
Although Coinbase had not yet released any additional information about cbBTC, the first news generated a lot of buzz, indicative of the increasing interest in wrapped Bitcoin assets and their use in decentralized finance.
BitGo, a cryptocurrency exchange based in Palo Alto, developed a comparable offering called Wrapped Bitcoin in January 2019.
Following the exchange’s relationship with Justin Sun, the founder of Tron, and BiT Global in Hong Kong, which would see some of its WBTC operations relocate to Southeast Asia, that initiative came under scrutiny.
Due to Sun’s engagement with WBTC, certain players in the DeFi market are concerned about the move. Block Analitica, a risk management company that evaluates DeFi platforms, has asked MakerDAO to cease issuing new WBTC-related debts.
Matt Belshe, CEO of BitGo, brushed down those worries, claiming Sun’s reputation was more of a factor in the debate than any real security concerns with WBTC. Belshe reassured the community that even with Sun’s engagement, WBTC’s security procedures would remain the same.
