Coinbase Launches cbBTC on Solana: All You Need to Know

Popular cryptocurrency exchange Coinbase has strengthened its foothold on the Solana ecosystem with the rollout of cbBTC, a wrapped version of Bitcoin that enables investors to get exposure to Bitcoin on the Solana network.  The new Solana-based token, which was initially announced at Solana Breakpoint in September, went live today, November 7.

Recall that when Coinbase first launched the token in early September, it was only available on Ethereum and its flagship layer-2 network, Base. The token has since enjoyed early success, hitting a $1 billion market cap in less than two months. Coinbase will now hope to build on that success as it brings cbBTC to one of the most widely used layer-1 networks outside the Ethereum ecosystem.

What You Should Know About cbBTC on Solana

cbBTC is an SPL token issued by Coinbase and reportedly backed 1:1 by Bitcoin (BTC) held in custody by the exchange. The SPL contract address for cbBTC is cbbtcf3aa214zXHbiAZQwf4122FBYbraNdFqgw4iMij.

Coinbase has teamed up with several Solana ecosystem projects to ensure that cbBTC has a use case from day one. According to the official announcement, users can now interact with cbBTC on popular Solana-based DeFi protocols such as Jupiter, Kamino, Raydium, and several others.

Notably, the launch of cbBTC comes as the Solana ecosystem continues to seek a reliable way to access BTC on the network. In the previous market cycle, Sollet BTC (soBTC), a wrapped Bitcoin version largely backed by the now-defunct FTX exchange, was the go-to option for users to use BTC on Solana.

However, the exchange’s infamous collapse and the soBTC depeg eroded market confidence in Solana-based BTC-pegged tokens. While other incumbents like Wormhole and Synthetify have tried to rekindle user interest, adoption has remained significantly low.

Evidently, Coinbase sees the market opportunity and wants to fill in the demand, especially at what looks like the first linings of a new bull market. With Coinbase’s reputation, especially being the custodian for most multi-billion dollar spot Bitcoin ETFs, investors may have little reason to doubt their competence to maintain the new token’s peg.

Is Coinbase Finally Paying Attention to Solana?

Coinbase’s latest move to launch cbBTC on Solana is significant for several reasons. As Coinbase noted in its announcement, cbBTC is the “first token” that Coinbase has issued on Solana. Before now, the exchange has largely been focused on promoting the adoption of the Ethereum network, as well as its flagship layer-2 network, Base.

Nonetheless, the release of cbBTC on Solana suggests that Coinbase is willing to explore other chains with significant economic activity. In April, the company enabled trading of Solana-based tokens on its widely used Coinbase Wallet, a move it has now followed up with the launch of cbBTC.

PayPal’s earlier launch of PYUSD on Solana may also have contributed to Coinbase’s move, further promoting the layer-1 network as a popular destination for developers.