cbBTC (Coinbase Wrapped BTC) is an ERC20 token backed by Bitcoin 1:1 launched by Coinbase last week. It is intended to facilitate Coinbase customers to trade Bitcoin at a lower cost and faster speed. However, this new product is facing a lack of Bitcoin. The controversy over the currency reserve certificate originated from Coinbase issuing this Bitcoin token without publishing the corresponding wallet address. The community began to wonder whether this was the so-called "air Bitcoin" and even accused Coinbase of selling cbBTC to BlackRock ( BlackRock).
Coinbase CEO Brian Armstrong came out to clarify this in response to community distrust of the product’s transparency. He said that cbBTC is provided with Bitcoin custody services by the Coinbase exchange itself, and the company’s minting and destruction of BlackRock’s spot Bitcoin ETF is transparent and on-chain, stressing that Coinbase is audited annually by Deloitte. He also mentioned, The company cannot disclose the wallet addresses of institutional clients due to privacy concerns.
Bloomberg analyst Eric Balchunas also disagreed with these community accusations against Coinbase, saying that the ETF helped stabilize Bitcoin prices during market volatility. In response to the cbBTC controversy, Armstrong admitted that the product is supported by Coinbase as a centralized custodian, but there are still critics who demand proof of Bitcoin reserves and audit results, and worry that the product may freeze user funds.
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〈MICA Daily｜Coinbase CEO denies cbBTC’s accusation of lack of Bitcoin reserves〉This article was first published in "Blocker".
