Coinbase on Thursday launched its new tokenization product, cbBTC, on the Base layer 2 network and Ethereum $2,360 announced that it has launched on its mainnet. This development is notable as the largest crypto exchange in the US is a major player in the market to enable the tokenization of BTC on other blockchains. cbBTC will be supported by the custody of Coinbase with a 1:1 ratio of BTC.
cbBTC and Equivalence
When users send BTC to their Base or Ethereum addresses via Coinbase, that BTC will automatically be converted to cbBTC. According to data from blockchain analytics firm Arkham, Coinbase has over 843,783 Bitcoin in on-chain assets 
$58,156 which is worth around $48.7 billion at current prices. The number of cbBTC tokens will be limited by the amount of bitcoin that Coinbase owns, which represents over 4% of the total supply of BTC.
DeFi Applications and cbBTC
Will Robinson, Coinbase’s vice president of engineering, stated that cbBTC “brings us one step closer to our vision of bringing 1 billion people onto the chain.” He added that with this new product, they are contributing to the construction of a more inclusive financial system by making it easier for bitcoin holders to access DeFi. cbBTC will be supported by various DeFi protocols such as Aerodrome and Curve on day one of launch.
BitGo and cbBTC
The launch of cbBTC comes on the heels of BitGo’s announcement that Justin Sun would be involved in wBTC’s new custodial operations. This change by BitGo has raised concerns among the crypto community. Coinbase announced the launch of cbBTC four days after BitGo’s announcement.
The Aave Chan Initiative has submitted a governance proposal for cbBTC to be available on Aave v3. Aave Chan Initiative founder Marc Zeller stated that they believe cbBTC will find a natural market fit in both the Base and Mainnet Aave pools.
Coinbase’s stock is down 18% in the past month to $157.22, after nearly doubling in the past year, reflecting the volatility of market conditions despite Coinbase’s expanding product offering.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
