cbBTC
Crypto Overview
Overview
cbBTC is a wrapped Bitcoin token issued by Coinbase, representing Bitcoin held in custody by the exchange. Each cbBTC token is backed 1:1 by actual Bitcoin, allowing users to utilize Bitcoin on Ethereum and other EVM-compatible networks.
Purpose and Utility
The primary purpose of cbBTC is to enable Bitcoin holders to participate in Ethereum-based DeFi applications while maintaining exposure to Bitcoin. The token provides a bridge between Bitcoin and Ethereum ecosystems, allowing for greater interoperability.
Business Model
Coinbase maintains custody of the underlying Bitcoin and issues cbBTC tokens on the Ethereum blockchain. The model is transparent, with verifiable Bitcoin reserves backing each token. Users can mint cbBTC by depositing Bitcoin with Coinbase, and redeem their cbBTC for the underlying Bitcoin at any time.
Real-World Adoption
As a relatively new wrapped Bitcoin solution, cbBTC has seen growing adoption within the Coinbase ecosystem. The token's primary usage aligns with its intended purpose of providing Bitcoin exposure in the Ethereum ecosystem.
Development Activity
The token is maintained by Coinbase, one of the largest regulated cryptocurrency exchanges. Regular audits and transparency reports are provided to verify the backing of tokens.
Token Distribution
cbBTC is minted based on user deposits, with no pre-mine or initial allocation to founders. The supply is directly correlated to user demand and Bitcoin deposits.
Crypto Impact
To assign a comfort level investing in cbBTC from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to cbBTC.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.