What is cbBTC?

cbBTC is Coinbase Wrapped BTC, a token that represents bitcoin on blockchains other than Bitcoin. Each cbBTC is meant to be backed one for one by bitcoin that Coinbase holds, so its value tracks bitcoin's. It was built so people could use bitcoin's value in decentralized finance apps without selling it.

What does cbBTC mean?

The "cb" stands for Coinbase, the same prefix the company uses for cbETH. Coinbase launched cbBTC on September 12, 2024, as a wrapped token on Ethereum and Base, its own layer 2 network. The Block reported launch partners including the lending apps Aave, Compound and Morpho and the exchanges Aerodrome and Curve. Coinbase added Solana in November 2024, its first token issued on that network, and BeInCrypto later reported supply on Arbitrum as well.

How does cbBTC from Coinbase work?

The white paper describes a simple loop. When a Coinbase customer withdraws BTC from their account to an Ethereum or Base address, the same amount of cbBTC is minted to that address. When cbBTC is sent to the customer's own Coinbase deposit address, it is burned and the matching BTC is credited back. Coinbase says it charges no fee to mint or burn at present, though network fees still apply. People without a Coinbase account can only get cbBTC by trading for it.

Coinbase says it keeps the reserve in hot and cold wallets, with cold wallet keys stored in the US and Europe, and uses no sub-custodians. At launch, conversions were limited to customers in places including the US (outside New York), the UK, the European Economic Area, Singapore, Australia and Brazil.

What is the difference between cbBTC vs BTC?

BTC lives on the Bitcoin blockchain, and you can hold it in your own wallet. cbBTC is a claim on bitcoin held by Coinbase, so it adds company and smart contract risk. The white paper says the contract has a role that can block an address from transfers and a role that can pause the whole contract. It also says the on-chain price is set by the market and is not maintained by Coinbase, so it can differ from bitcoin's price.

Transparency was an early criticism. Cointelegraph reported in September 2024 that Coinbase planned to add proof of reserves after analysts said it lagged rivals, and Coinbase later published its reserve addresses.

How does cbBTC vs WBTC compare?

Both are tokens backed by bitcoin held by a custodian, and both are mostly used in DeFi. The difference is who holds the coins. Wrapped bitcoin (WBTC) uses merchants and a custody setup run by BitGo with BiT Global, while cbBTC relies on Coinbase alone. Designs such as tBTC try to spread that trust across many signers instead of one company.

Crypto prices are volatile, and a wrapped token depends on its custodian as well as on the price of bitcoin.