Coinbase teases new wrapped Bitcoin product amid ongoing WBTC controversy

Coinbase has sparked speculation in the crypto community after dropping a mysterious hint about a potential new packaged Bitcoin product tentatively dubbed “cbBTC.”

The news came from a post made on Coinbase’s official X account on August 14. The post simply read “cbBTC” followed by the comment “soon.”

Jesse Pollak, head of Coinbase’s layer 2 network Base, later added to the speculation by expressing his enthusiasm for Bitcoin (BTC) in a post, hinting at building a “massive Bitcoin economy” on the L2 network.

To say it out loud: I love Bitcoin, I am so grateful for his role in launching crypto, and we will build a massive Bitcoin economy @basis.

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

At press time, Coinbase had not added any new details about cbBTC, but the excitement surrounding the initial announcement reflects growing interest in wrapped Bitcoin assets and their role in decentralized finance.

A similar product, Wrapped Bitcoin (WBTC), was created by Palo Alto-based cryptocurrency exchange BitGo in January 2019. The project came under scrutiny after the exchange entered into a partnership with Hong Kong-based BiT Global and Tron (TRX) founder Justin Sun, which would have brought some of the WBTC business to Southeast Asia.

Some players in the DeFi space have expressed concerns about this move, including Block Analitica, a risk management firm that provides valuations for DeFi platforms, as Sun asked MakerDAO to stop issuing new debt instruments denominated in WBTC due to its affiliation with WBTC.

BitGo CEO Matt Belshe, however, downplayed these concerns, saying that the controversy was mostly due to Sun’s reputation rather than actual security concerns regarding WBTC. Belshe assured the community that WBTC’s security protocols would remain intact with no expected changes, even with Sun’s involvement.