Kraken Wrapped Bitcoin Token Launched to Promote DeFi Adoption

Key Points:

• Kraken has introduced its wrapped Bitcoin token, kBTC, backed 1:1 by Bitcoin, and available on Ethereum and OP Mainnet.
• Kraken wrapped Bitcoin token will support various leading DeFi applications, though there will be no spot markets available at launch.

Kraken has officially announced its own wrapped Bitcoin token, kBTC.

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Kraken Wrapped Bitcoin Token kBTC Unveiled

This new ERC-20 token will be issued on the Ethereum network and OP Mainnet, until recently known as Optimism, and is designed to be backed 1:1 with actual Bitcoin.

The Bitcoin backing kBTC will be stored in a segregated wallet within Kraken Financial, the exchange’s U.S.-qualified custody solution, and for security. Kraken will make the wallet address publicly known to enable customers to verify that Bitcoin is held in full reserve.

Kraken is one of several growing exchanges that are creating wrapped Bitcoin tokens. There has been much action in this area since news hit the wire about BitGo partnering with Tron founder Justin Sun. Rival Coinbase launched its version of the wrapped Bitcoin product, wrapped BTC from Coinbase abbreviated as cbBTC, on Ethereum and Base chains last month.

kBTC Positioned for Enhanced DeFi Integration and Utility

The Kraken wrapped Bitcoin listing aligns with the exchange for fostering greater adoption of DeFi. Wrapped tokens make unsupported cryptocurrencies, like Bitcoin and Ether, consumable in DeFi applications that range from trading, lending, and borrowing in decentralized markets. The biggest wrapped token, Wrapped Bitcoin, has a market capitalization of nearly $10 billion and is crucial to the DeFi markets to act as collateral for lending.

Upon launch, Kraken wrapped Bitcoin will immediately support the following set of leading key DeFi applications: Kraken, Kraken Wallet, Ethereum, Optimism, Paraswap, Yearn, Gauntlet, deBridge, Definitive, CowSwap, Beefy, Velodrome, Curve, and Morpho.

Though no available spot markets for kBTC are currently supplied, clients will have the ability to immediately redeem their Bitcoin for the underlying asset and trade as they normally would.