US cryptocurrency exchange Coinbase announced on Thursday the launch of cbBTC (Coinbase Wrapped BTC), an ERC20 token backed 1:1 by Coinbase managed Bitcoin, serving as a wrapper version of Bitcoin. CbBTC initially supports the Ethereum memory blockchain and Coinbase supported Base network, and is expected to expand to other chains in the future.

Coinbase states that its customers can seamlessly and securely access financial applications within the Ethereum ecosystem using their existing Bitcoin holdings starting today. When cbBTC is launched, it will be adopted by multiple decentralized finance (DeFi) platforms, including decentralized exchanges Aerodrome and Curve, lending protocol Aave, and cross chain protocol DeBridge.

Coinbase wrote in an article:

CbBTC aims to be seamlessly compatible with DeFi applications, so users can now invest in novel DeFi use cases, such as providing their Bitcoin as liquidity to DeFi protocols or borrowing other cryptocurrency assets as collateral

According to official website data, when Coinbase users transfer their BTC from Coinbase to an address on Base or Ethereum, the BTC will be automatically converted to cbBTC in a 1:1 ratio. When a user receives cbBTC in their Coinbase account, the token will also be converted to BTC in the corresponding proportion. CBBTC will not have a separate order book or trading pair on Coinbase.

It should be noted that the sending and receiving functions of cbBTC are currently only open to Coinbase customers in the United States (excluding New York State), the United Kingdom, European Economic Area (EEA) countries, Singapore, Australia, and Brazil. However, the token will be available to global users on the Base and Ethereum chains, and users can purchase cbBTC through Coinbase wallets or from other supported third-party exchanges.