Coinbase Wrapped BTC (cbBTC) is a wrapped Bitcoin token issued by Coinbase that maintains a 1:1 backing with Bitcoin (BTC) held in secure custody. This digital asset enables users to utilize their Bitcoin holdings in decentralized finance (DeFi) applications while maintaining the ability to redeem the underlying BTC through Coinbase. ^{[1] [2]}

Overview

cbBTC is a wrapped Bitcoin token issued by Coinbase, backed 1:1 by BTC held in custody, including cold storage. It allows users to convert BTC into a transferable token that can be redeemed for the underlying asset by depositing it into their Coinbase accounts. Designed for compatibility with DeFi applications, cbBTC enables users to provide liquidity, use it as collateral for borrowing, or utilize it for payments. Wrapped assets like cbBTC increase liquidity and expand onchain financial use cases.

cbBTC maintains a 1:1 backing with BTC through a minting and burning process that ensures supply matches reserves. When users withdraw BTC from Coinbase to Ethereum, Base, or Solana, an equivalent amount of cbBTC is minted and sent to their wallet. When cbBTC is deposited back into a Coinbase address, it is burned, and the corresponding BTC is released to the user’s Bitcoin account.

This process is managed on EVM chains through audited smart contracts that regulate minting and burning. The smart contract structure is based on Coinbase’s wrapped token framework, which is also used for cbETH. It is open-source on GitHub. Key contract management roles include administrators, minters, and security functions, requiring multi-party approval. On Solana, cbBTC operates as an SPL token with similar controls over minting, freezing, and updating metadata. ^{[3] [4]}

Security & Compliance

Coinbase secures the BTC backing cbBTC through wallet infrastructure, regular audits, and monitoring systems. Smart contracts involved in the minting and redemption process undergo third-party security audits, including by OpenZeppelin. The contract framework used for cbBTC is based on the audited cbETH Solidity contract, with no material changes.

The BTC reserves backing cbBTC are held 1:1 at Coinbase, with redemption rights assigned to cbBTC holders. Custodial services follow Coinbase’s user agreement and utilize hot and cold wallets. Cold wallet private keys are stored in encrypted, secured facilities in the U.S. and Europe and require multi-party authorization for access. Internal audits verify private key management, and Coinbase does not use sub-custodians for asset storage.

cbBTC operates within regulatory frameworks, adhering to Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. Coinbase holds licenses for crypto custody and trading across multiple jurisdictions, including the U.S., Germany, Singapore, Canada, and Bermuda, and is registered as a Virtual Asset Service Provider in several countries. ^[4]