Coinbase is phasing out wBTC and plans to stop trading it on December 19. They cite "listing standards" as the reason for this decision. This comes right after they launched a competing product called cbBTC.
wBTC is a token that represents Bitcoin on Ethereum and other blockchains. It’s offered by BitGo, but there are similar products that work in the same way. They hold crypto on one side and represent that token on a different blockchain.
This change follows Coinbase's introduction of cbBTC, which operates on the Base blockchain.
Recently, wBTC has faced a lot of scrutiny. This is largely due to BitGo's announcement about a joint venture with BiT Global, a custodian partly owned by Justin Sun. Many in the crypto community raised concerns about Sun’s involvement. However, BitGo CEO Mike Belshe reassured that Sun has very little control over BiT Global. The way the custodian is set up means no individual can own more than 20%, and the keys are shared among several parties.
In an interview with CoinDesk, Belshe stated that critics of the BitGo-BiT Global partnership weren’t being “intellectually honest.” He suggested they were more focused on their own projects than on providing fair criticism of wBTC.
“We are a fiduciary today, and it’s our duty to ensure that the assets are protected, regardless of where they are held,” he said. He also took a jab at Coinbase’s cbBTC, calling it too centralized.
“Of course, the central bank, CB, Coinbase, they would love to have Wrapped Bitcoin,” he added. “There’s no doubt that the model BitGo is proposing for storing the keys is far better than anything Coinbase could come up with.”
Belshe believes that this level of centralization goes against the spirit of decentralized finance (DeFi).
“If the DeFi community chooses central bank Coinbase as the ultimate steward, then I think all hope for DeFi is lost,” he concluded.