Coinbase appears poised to enter the wrapped Bitcoin market following recent disclosures from the firm.

On August 13th, Coinbase’s official X (previously Twitter) account hinted at an upcoming product with a post displaying “cbBTC,” followed by “coming soon.” Coinbase Ventures’ Head of Corporate and Business Development, Shan Aggarwal, remarked , it had been “hard to keep this under wraps.”

Although specifics about the product are still limited, Jesse Pollak, the lead developer of Coinbase’s Base network, has hinted at plans to establish a significant Bitcoin economy on the Ethereum Layer-2 network.

He said :

“To be direct: I am a huge fan of bitcoin, [I’m] incredibly grateful for its role [in] sparking crypto, and we are going to create a massive bitcoin economy on Base.”

Dan Elitzer, co-founder of the venture capital firm Nascent, indicated that cbBTC would be strategically crucial for the cryptocurrency company. He speculated that the new product could surpass BitGo’s current Wrapped Bitcoin ( WBTC ) supply within six months of its launch.

In his words:

“cbBTC was a natural progression and a very strategic move for Coinbase. Honestly, I’m surprised they didn’t launch this sooner.”

This sentiment was echoed by DCinvestor, a well-known cryptocurrency investor, who believes Coinbase could use cbBTC to encourage their Bitcoin holders to become active users of Base and Ethereum .

WBTC troubles

Coinbase's announcement about cbBTC comes amid recent controversy surrounding Tron founder Justin Sun ‘s involvement with BitGo’s WBTC.

On August 9th, BitGo unveiled plans to transfer WBTC management to a new collaborative venture involving itself, BiT Global, a Hong Kong-based investment manager, and Sun. This decision sparked significant criticism within the cryptocurrency community, with primary concerns centered on Sun’s participation.

Despite these concerns, BitGo CEO Mike Belshe and Sun have maintained that the cryptocurrency entrepreneur’s role in the new joint venture was purely strategic.

Sun said :

“The minting process is entirely managed by the custodians Bitglobal and Bitgo using the same procedures as before. In essence, Bitglobal and Bitgo will not approve any unaudited transactions. The keys remain secured using the same Bitgo cold wallet technology and offline keys, with backups in multiple countries and regions.”

However, Elitzer criticized the move, claiming that no experienced DeFi user or risk manager would want to maintain exposure to WBTC under Sun’s influence.

He also pointed out that this change in management could lead to significant disruption, encouraging various protocols and platforms to support alternative bridged BTC solutions.