Coinbase Hints at Launch of ‘Wrapped’ Bitcoin

Cryptocurrency exchange Coinbase has announced the potential launch of a product called cbBTC. Commentators speculated that this refers to its own version of ‘wrapped’ Bitcoin.

Coming soon.

— Coinbase ?️ (@coinbase) August 14, 2024

The platform added only the word “soon” to its very succinct message.

Almost simultaneously, Jesse Pollak, head of the Coinbase-supported Ethereum Layer 2 network Base, expressed his love for digital gold.

to say it out loud: I love bitcoin, am so grateful for it’s role kickstarting crypto, and we’re going to build a massive bitcoin economy on @base.

— Jesse Pollak (jesse.xyz) ?️ (@jessepollak) August 14, 2024

“I am very grateful for its role in the development of cryptocurrencies, and we are going to build a huge Bitcoin economy on Base,” he noted.

Pollak also retweeted a post from a user who stated their readiness to immediately transfer their BTC to the L2 network should the opportunity arise.

“There are many such cases,” responded the head of Base.

Coinbase’s announcement of cbBTC and Pollak’s hints came just days after BitGo’s controversial announcement of a partnership with the Tron ecosystem and its founder Justin Sun.

The issuer of the most popular version of ‘wrapped’ Bitcoin, WBTC (with a market capitalization exceeding $9.3 billion), will transfer control of the asset to a joint venture with the Hong Kong-registered custodial platform BiT Global, associated with Tron. BitGo will hold a minority stake in the joint venture.

Justin Sun’s involvement has raised certain concerns within the community.

Risk management firm BA Labs warned of an “increased level of risk.” Experts noted that projects associated with the founder of Tron Foundation have faced operational and transparency issues.

In a post on the MakerDAO forum, BA Labs proposed closing all new borrowings secured by WBTC and preventing the creation of additional debt.

“We believe that Sun’s involvement as a controlling shareholder in the new WBTC joint venture represents an unacceptable level of risk,” the company argued.

BitGo CEO Mike Belshe assured that the core protocols of WBTC remain unaffected—”just as they are today.” 

Sun confirmed “no changes” and emphasized that the partnership does not grant him direct access to funds.

Regarding the cbBTC product, users also expressed concerns, particularly about centralization. One such commentator was BitGo COO Chen Fang.

In turn, Belshe, among others, played on the abbreviation cbBTC as “Central Bank Bitcoin.”

Central Bank BTC https://t.co/tZXWcNDck6

— Mike Belshe (@mikebelshe) August 14, 2024

Earlier, Base became one of the main drivers for the Ethereum-based L2 ecosystem reaching a record 12.52 million transactions processed in a single day.