Coinbase announced the launch of its new tokenization product, cbBTC, on Thursday. This development highlights the significant role of the largest U.S. cryptocurrency exchange in facilitating the tokenization of Bitcoin (BTC) 
$95,195 across different blockchains. cbBTC will be supported by the 1:1 backing of Bitcoin held under Coinbase’s custody.
Understanding cbBTC and Its Parity
When users send BTC via Coinbase to Base or Ethereum 
$3,334 addresses, the BTC will automatically convert to cbBTC. According to data from blockchain analytics firm Arkham, Coinbase’s on-chain assets include over 843,783 Bitcoins, valued at approximately $48.7 billion at current prices. The number of cbBTC tokens will be limited by the amount of Bitcoin owned by Coinbase, representing more than 4% of the total BTC supply.
DeFi Applications and cbBTC
Will Robinson, Coinbase’s Vice President of Engineering, stated that cbBTC takes a step closer to the vision of bringing “1 billion people on-chain.” He emphasized that this new product will facilitate Bitcoin holders’ access to DeFi, contributing to the construction of a more inclusive financial system. Various DeFi protocols, such as Aerodrome and Curve, will support cbBTC on its launch day.
The launch of cbBTC came shortly after BitGo announced its involvement in new custody operations for Justin Sun’s wBTC. This change raised concerns within crypto communities. Coinbase announced cbBTC just four days after BitGo’s announcement.
The Aave Chan Initiative has proposed governance to enable the use of cbBTC on Aave v3. Marc Zeller, founder of the Aave Chan Initiative, expressed confidence that cbBTC will find a natural market fit in both Base and Mainnet Aave pools.
Despite nearly doubling last year, Coinbase’s stock has seen an 18% decline in the last month, currently trading at $157.22. This reflects the volatility of market conditions despite Coinbase’s expanding product lineup.
