Coinbase, one of many main cryptocurrency exchanges, has formally unveiled its wrapped Bitcoin token, cbBTC, out there on Ethereum and Base.
Introduced on September 12, cbBTC is tied to Bitcoin with a 1:1 backing, which means every cbBTC token is absolutely collateralized by an equal quantity of Bitcoin held by Coinbase.
It will not have its personal buying and selling pairs or order books on Coinbase.
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The mechanics behind this wrapped Bitcoin are easy: customers can mint cbBTC by sending Bitcoin to an Ethereum or Base deal with. The method works in reverse as nicely—when cbBTC is distributed to a Coinbase deal with, it’s mechanically redeemed for conventional Bitcoin.
The aim of tokenizing Bitcoin is to open up decentralized finance (DeFi) functionalities for the cryptocurrency, which is commonly seen as restricted on this area. For instance, with cbBTC, individuals can use their Bitcoin as collateral for loans or lend it to earn curiosity.
At launch, cbBTC will likely be built-in with a number of DeFi platforms akin to Aave, Compound Finance, Morpho, Spark, and Moonwell, amongst others. Coinbase is eyeing future expansions to further blockchains and ecosystems; nevertheless, no particular timelines or particulars have been offered within the preliminary announcement.
This transfer represents one other step towards growing Bitcoin’s presence within the DeFi area, offering extra methods for customers to make the most of their Bitcoin holdings.
In different information, Coinbase is dealing with a lawsuit from the US Securities and Alternate Fee, which accused the crypto alternate of breaking federal securities legal guidelines. Lately, Coinbase requested to overview SEC Chair Gary Gensler’s personal emails, a transfer the SEC is pushing again towards.
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