Coinbase Hints at Launch of ‘cbBTC’ Following BitGo Wrapped Bitcoin Issues

Recent speculation suggests that Coinbase may be preparing to introduce its own version of wrapped Bitcoin, potentially named “cbBTC,” which could be integrated into its layer-2 platform known as Base.

Potential Product Launch

On August 13, the official Coinbase account posted a simple message on X, stating “cbBTC,” and followed it with an announcement that the product would be “coming soon.”

Shortly after, Jesse Pollak, who leads Coinbase’s layer-2 network Base, expressed his enthusiasm for Bitcoin, emphasizing Base’s intention to cultivate a “massive Bitcoin economy” within its framework.

Background on BitGo Controversy

The buzz surrounding cbBTC follows recent turmoil involving BitGo, the organization behind Wrapped Bitcoin (WBTC), and Justin Sun, the founder of Tron.

• On August 9, BitGo revealed plans to transition control of WBTC to a collaborative partnership that includes itself, BiT Global, and Sun’s network.
• This move raised concerns among members of the decentralized finance (DeFi) community, prompting calls to withdraw WBTC support from key protocols.

On August 10, to address these concerns, the crypto risk management firm Block Analitica Labs proposed measures on MakerDAO’s governance forum aimed at shutting down new WBTC debts and restricting new borrowings backed by WBTC collateral.

BA Labs articulated their findings, noting that Sun’s role in the new WBTC venture posed significant risks to the ecosystem.

Response to Security Concerns

Amidst the reactions, BitGo’s CEO Matt Belshe downplayed the security-related fears, suggesting that the backlash stemmed from Sun’s reputation instead of an accurate evaluation of the situation.

Belshe reassured stakeholders that the fundamental security protocols governing WBTC would remain unchanged, asserting that they would maintain the same standards as before, independent of Sun’s involvement.

In response to the controversy, Justin Sun clarified in an August 11 post that no modifications had been made to WBTC operations and that he did not possess direct access to the funds.