Coinbase plans to add verifiable proof of reserves to its newly launched Bitcoin (BTC) wrapper, Coinbase Wrapped BTC (cbBTC), a spokesperson for Coinbase confirmed to Cointelegraph on Sept. 30.
Adding proof of reserves (PoR) will put cbBTC on par with rival Bitcoin wrappers such as Wrapped Bitcoin (WBTC) and 21.co Wrapped Bitcoin (21BTC). It also addresses concerns about Coinbase’s perceived lack of transparency.
“With cbBTC, we’ve planned PoR since the early days and the team is hard at work building it,” Lukas Staniszewski, a product manager at Coinbase, said in a Sept. 23 post on the X platform.
Chainlink proof of reserve. Source: Chainlink
Related: 21.co Bitcoin wrapper to add Chainlink proof of reserve
On Sept. 23, Coinbase updated an earlier blog post to note PoR’s inclusion on cbBTC’s product roadmap but has not announced the plans otherwise.
“Greater transparency with proof of reserves has been part of our roadmap since the conception of cbBTC and will follow,” Coinbase said.
In September, Coinbase was criticized for allegedly lagging rival Bitcoin wrappers in transparency. It was also the target of unfounded rumors alleging Coinbase was issuing unbacked Bitcoin IOUs to BlackRock, a crypto exchange-traded fund (ETF) sponsor.
“[A]lmost every single bridge (including WBTC) provides a Proof of Reserves so you can check that the issued coins are backed but Coinbase doesn’t,” 0xngmi, DefiLlama’s pseudonymous developer, said in a Sept. 23 post on the X platform.
“cbBTC is way below the standard in terms of transparency,” 0xngmi added.
Wrapped tokens by market capitalization. Source: CoinGecko
Launched on Sept. 12, Coinbase’s cbBTC has emerged as one of the most popular BTC wrappers, with some $250 million in total value locked (TVL), according to CoinMarketCap.
Coinbase’s cbBTC stands out among Bitcoin wrappers in committing to reimburse holders for losses from certain cybersecurity exploits. It is also subjected to extensive oversight by New York’s Department of Financial Services.
Initially mintable on Ethereum and Base — Coinbase’s layer-2 scaling network — cbBTC will soon launch on Solana, according to a Sept. 20 post on the X platform.
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