Coinbase has announced plans to launch cbBTC, a wrapped version of Bitcoin, on its Base network. Although the details are not yet disclosed, this move aims to expand Coinbase’s tokenized asset offerings and potentially reshape the landscape of wrapped Bitcoin.
As demand for tokenized Bitcoin on Ethereum-compatible chains grows, Coinbase’s entry into this space could significantly impact market dynamics. Coinbase previously launched cbETH, a wrapped Ethereum token, in August 2022. With a circulating supply of about 210,000, cbETH has seen substantial adoption.
Jesse Pollak, the lead developer on Base, expressed enthusiasm for Bitcoin’s potential on Coinbase’s layer-2 network, stating: “I love bitcoin, am so grateful for it’s role kickstarting crypto, and we’re going to build a massive bitcoin economy on @base.”
Anndy Lian, a blockchain expert, views cbBTC as a chance for Coinbase to offer a transparent alternative to Wrapped Bitcoin (WBTC), especially amid concerns about Justin Sun’s involvement. BitGo, behind WBTC, recently partnered with BiT Global, linked to Sun, prompting him to clarify his strategic role without control over WBTC reserves. WBTC is currently the largest wrapped Bitcoin asset, boasting a market capitalization of $9 billion.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
Coinbase has teased the upcoming launch of cbBTC, a new tokenized version of Bitcoin, on its Base network. Experts told Decrypt they think it could reshape the landscape of tokenized Bitcoin (BTC).
This new token, announced via a cryptic tweet in the early hours Wednesday, signals Coinbase’s ambitious plans to expand its tokenized asset offerings and potentially reshape the landscape of wrapped Bitcoin.
Coinbase has not yet responded to requests for more details from Decrypt.
The introduction of cbBTC comes as the demand for tokenized Bitcoin on Ethereum Virtual Machine (EVM)-compatible chains continues to grow.
Nearly 156,608 BTC, valued at approximately $9.5 billion, has been tokenized and is being used across various decentralized finance (DeFi) ecosystems, according to CoinGecko.
Coinbase’s entry into this space with cbBTC could significantly impact the market dynamics, particularly given the exchange’s brand reputation and established institutional custody solutions.
This development follows Coinbase’s launch of cbETH, a wrapped and staked Ethereum token, in August 2022. The cbETH token now has a circulating supply of about 210,000, according to Coinbase, which means roughly two-thirds the total 600,000 supply that’s been created in the past two years has been burned.
Base creator Jesse Pollak expressed enthusiasm about the potential of Bitcoin on Coinbase’s layer-2 network.
In a tweet following the cbBTC announcement, Pollak stated, “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.”
Industry experts said the introduction of cbBTC is likely to have far-reaching implications for the cryptocurrency market, particularly in the realm of DeFi.
Alvin Kan, chief operating officer of Bitget Wallet, told Decrypt that cbBTC is poised to gain rapid market acceptance upon launch, citing Coinbase’s strong reputation and custody services.
“As a globally recognized exchange, Coinbase’s goal is to create a more open, decentralised, and highly liquid tokenized version of BTC,” Kan said.
However, not all experts are convinced that cbBTC will immediately dominate the market.
Jenny Zheng, chair of non-profit organization Lady of Redecentralise, pointed out the established trust network and deep integration of existing wrapped Bitcoin options like WBTC in the DeFi ecosystem. WBTC is currently the 13th largest asset by market capitalization on Coingecko and boasts a $10.7 billion market capitalization.
Offering a broader perspective on Coinbase’s strategy, Anndy Lian, an intergovernmental blockchain expert, said a new tokenized version of BTC will be well-received, given Coinbase’s reputation and the trust built within the crypto community.
“This is an opportunity to offer a more transparent and reliable alternative to WBTC,” he said, “which could attract users who are wary of Justin Sun’s involvement.”
BitGo, the company behind Wrapped Bitcoin, announced on Friday that it has partnered with BiT Global—a company with links to Tron founder Sun—to launch a new venture that will manage WBTC. The new partnership will leave BitGo as a minority stakeholder, the company said. The pushback on Sun being associated with WBTC has been strong enough to prompt the Tron founder to offer a disclaimer on Twitter.
“My personal involvement in WBTC is entirely strategic,” he wrote, “I do not control the private keys to the WBTC reserves and cannot move any BTC reserves.”
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
By now, you’ll be well aware that Changpeng Zhao (CZ) has resigned from the beast of an exchange that is Binance. Singaporean ex-MAS director Richard Teng has taken the reins as CEO, following in the few legal footprints left by CZ.
Over $1 billion has left the world’s largest crypto along with CZ as users withdrew their funds in response to the crypto titan pleading guilty to anti-money laundering violations in the US.
Binance was fined $4.3 billion whilst CZ himself agreed to pay a $50 million penalty.
These withdrawals are not necessarily a reflection of the confidence the market has in Teng but rather, the lack of confidence in Binance’s overall position.
As Blockhead contributor Anndy Lian explains, CZ’s supporters were disappointed in his resignation and “if not handled properly they may lose trust or interest in the exchange.”
“Moreover, CZ’s departure could also create a power vacuum or a leadership crisis within, as Teng may face resistance or opposition from some of the existing executives or employees who are loyal to CZ or who have different views or agendas,” Lian states.
Of course, the Binance fallout is serving as good news for its competitors. Crypto trading giant OKX saw its largest daily inflow of $152 million. Bybit enjoyed a $50.9 billion inflow and Bitstamp attracted $30.5 million.
“We anticipate that this will accelerate the outflow of projects, exchanges, founders and firms from direct U.S. regulatory purview,” crypto market maker Auros COO Jason Atkins told The Block. “Compliance will now be a non-negotiable so as to minimize lapses in the AML and KYC requirements in the U.S., irrespective of the country of incorporation.”
Coinbase has experienced a continuous rise in its stock price too, rising 12% over the past few days and more than 41% throughout the past month.
Reacting to Binance’s news, CEO Brian Armstrong took to Twitter to emphasise the importance of compliance.
“Since the founding of Coinbase back in 2012 we have taken a long-term view. I knew we needed to embrace compliance to become a generational company that stood the test of time,” he said. “This meant we couldn’t always move as quickly as others… Today’s news reinforces that doing it the hard way was the right decision.”
Other winners include degens who jumped onto meme coins aptly titled $CZ and $TENG, enjoying returns of up to 100,000% and 14,000% respectively.
4 Fingers, Big 4 Audit, FUD 4 Real
The image of CZ holding up four fingers has become a meme of its own. Stemming from an initial tweet he wrote earlier this year, the figure reflects CZ’s fourth item on his “Do’s and Dont’s” list: Ignore FUD.
With CZ finally exiting Binance, it’s now time to re-evaluate the FUD surrounding the exchange and whether we can apply his advice to his own firm.
As mentioned, Binance is set to pay a fine of $4.3 billion. A simple glance at Binance’s proof-of-reserves will indicate that the exchange backs customer assets one-to-one.
“People can withdraw 100% of the assets they have on Binance. We will not have an issue at any given day,” CZ reassuringly said in an interview. “In crypto, there’s no central bank printing money to bail out banks when there’s a liquidity crunch. Crypto businesses have to hold user assets one-to-one, and that’s what we do – it’s very simple.”
According to Binance, the exchange has $6.35 billion in total assets, which means it should be able to easily pay off the $4.3 billion fine without eating into customer funds.
However, Binance has refrained from disclosing its liabilities. When FTX collapsed, eyes predictably turned to Binance. At that time, CNBC’s Becky Quick pressed CZ on whether Binance could handle a $2.1 billion payment.
“Would you be able to handle it if somebody asked you for $2.1 billion back?” Quick asked him.
“We are financially OK,” CZ replied, failing to provide a direct answer.
When Quick pressed him on getting a Big 4 auditor to vet his firm, CZ claimed none wanted to work with him.
“A Big 4 auditor would reveal [problems],” Quick said. “If you’re saying that some of them don’t want to work with you, that raises questions too. They don’t want to work with you because you don’t have the files and the data that would make them feel comfortable to give their stamp of approval?”
In response, CZ pushed the blame onto the auditors. “Many of them don’t know how to audit crypto exchanges,” he said.
CNBC’s Andrew Ross Sorkin pointed out that Coinbase has a Big 4 auditor, to which a flummoxed CZ replied, “I don’t look at Coinbase.”
Star Trek or Fiction?
In CZ’s internal letter addressed to Binance staff, the now-former-CEO turned to Star Trek for words of wisdom. “I need everyone to continue performing admirably,” he said, lifting from the 2009 Star Trek film.
Binance users will now have to decide how much of what CZ told them is fiction, like his Star Trek quote. Last year, CZ was reluctant to answer whether Binance could cover a $2.1 billion fine. Its current $4.3 billion penalty is more than double that.
Whilst its proof-of-reserves points to a $6.35 billion asset stronghold, Binance’s reluctance to permit an audit means its liabilities could diminish this number substantially.
Perhaps Teng will straighten up Binance’s financials, in line with regulatory demands. But the truth could be painful to hear.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
