Kraken has introduced Kraken Wrapped Bitcoin (kBTC), an ERC-20 token backed 1:1 by Bitcoin held in Kraken’s custody.
The kBTC token is compatible with Ethereum and OP Mainnet, enabling access to DApps across blockchains.
In 2024, the global crypto market has seen significant developments, including the launch of Bitcoin ETFs and growing adoption by both institutions and governments. As we enter Q4, the momentum continues with new projects and innovations. The leading crypto exchange Kraken has joined the action by introducing its own wrapped version of Bitcoin.
On October 17, Kraken officially launched Kraken Wrapped Bitcoin (kBTC), an ERC-20 token that is backed 1:1 by Bitcoin held in Kraken’s custody. This move is part of Kraken’s broader effort to bring Bitcoin into more decentralized applications (DApps) and enable cross-chain compatibility.
$KBTC is officially onchainBacked 1:1 with $BTC held by Kraken Financial, allowing clients to transact in DeFi with our best-in-class Special Purpose Depository Institution banking license.more peace of mind for usershttps://t.co/SO2NnFzy2q
— Dave Ripley (@DavidLRipley) October 17, 2024
What Makes Kraken’s New kBTC Stand Out in the WBTC Market?
kBTC has been designed to operate across multiple networks, including Ethereum and OP Mainnet (formerly Optimism). By leveraging these networks, Kraken ensures that users can use Bitcoin’s value in various blockchain applications beyond its native network.
Further, Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution (SPDI), will oversee the custody of the Bitcoin-backed kBTC, ensuring maximum security. This SPDI status gives Kraken a solid regulatory framework and full-reserve backing, adding a layer of trust for users.
This launch comes at a time when competition in the wrapped Bitcoin space is heating up. Kraken is joining the ranks of major players like Coinbase and 21Shares, both of which launched their own wrapped Bitcoin tokens—cbBTC and 21BTC—last month. Wrapped assets like these help bridge Bitcoin with other networks, unlocking more functionality for users.
Kraken’s approach includes rigorous security measures, including a thorough audit of the kBTC smart contract by the third-party firm Trail of Bits, ensuring user assets remain safe.
Meanwhile, Kraken is also facing legal challenges. In 2023, the U.S. SEC filed charges against the exchange for allegedly operating without proper registration as a securities exchange. The lawsuit continues, with a federal judge recently ruling in favor of the SEC’s case proceeding to trial. Despite this, Kraken is pushing forward with innovation, determined to strengthen its place in the market.
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