Originally published on: September 30, 2024
Coinbase is set to bolster the security of its recently launched Bitcoin wrapper, Coinbase Wrapped BTC (cbBTC), by incorporating verifiable proof of reserves. This development, confirmed by a Coinbase spokesperson to Cointelegraph on September 30, aims to align cbBTC with competing Bitcoin wrappers like Wrapped Bitcoin (WBTC) and 21.co Wrapped Bitcoin (21BTC), while also addressing concerns about Coinbase’s transparency.
Lukas Staniszewski, a product manager at Coinbase, emphasized the importance of proof of reserves for cbBTC. In a post on the X platform on September 23, Staniszewski stated that incorporating this feature has been a key focus for the team since the early stages of developing cbBTC.
Coinbase updated a blog post on September 23 to outline the inclusion of proof of reserves in cbBTC’s product roadmap. Although specific details of the implementation have not been disclosed, Coinbase remains dedicated to enhancing transparency and security for cbBTC users.
The decision to introduce proof of reserves was partly influenced by criticisms leveled at Coinbase for perceived shortcomings in transparency compared to other Bitcoin wrappers. The move aims to dispel rumors and establish greater credibility in the market.
Since its launch on September 12, cbBTC has garnered significant attention, boasting $250 million in total value locked (TVL), according to CoinMarketCap. In addition to its commitment to reimburse holders for losses from cybersecurity exploits, cbBTC is subject to rigorous oversight by the New York Department of Financial Services.
While cbBTC is currently mintable on Ethereum and Base, Coinbase’s layer-2 scaling network, plans are underway to launch it on Solana in the near future. This expansion will provide users with more options for utilizing cbBTC across multiple platforms.
By incorporating proof of reserves, Coinbase is taking proactive steps to enhance the security and transparency of the cbBTC platform. This move underscores Coinbase’s commitment to providing a secure and reliable service to its users. Subscribe to our Finance Redefined newsletter for more insights and updates on DeFi developments.
