Kraken Introduces Kraken Wrapped Bitcoin (kBTC) Token to Increase Bitcoin's Utility Across Decentralized Applications

On October 17, Kraken introduced Kraken Wrapped Bitcoin (kBTC), a new ERC-20 token aimed at increasing Bitcoin’s utility across decentralized applications

Kraken has introduced Kraken Wrapped Bitcoin (kBTC), a new ERC-20 token designed to enhance Bitcoin's usability across decentralized applications (dApps) on networks like Ethereum and OP Mainnet. Backed 1:1 by Bitcoin and held in custody at Kraken, each kBTC token enables users to interact with Bitcoin's value within the decentralized finance (DeFi) ecosystem.

The launch of kBTC aims to integrate Bitcoin's store of value and security capabilities into broader blockchain ecosystems, particularly those operating on Ethereum and beyond. Each kBTC token is securely held at Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution (SPDI). The kBTC smart contract has also undergone an audit by the security firm Trail of Bits.

Kraken highlights the interoperability aspect of kBTC, allowing Bitcoin to be utilized across different networks. The token is initially set to integrate with Ethereum and OP Mainnet, with plans for further expansion to non-EVM chains in the future. This increased flexibility is touted as making kBTC a valuable tool for developers building dApps using Bitcoin or for investors seeking to access Bitcoin in on-chain environments.

Moreover, the exchange allows users to independently verify that each kBTC token is fully backed by Bitcoin by inspecting Kraken's on-chain reserves.

Kraken's launch of kBTC also includes partnerships with several platforms from Day 1, such as deBridge, Definitive, Gauntlet, ParaSwap, and Yearn, which will incorporate kBTC into their services. These partnerships are expected to help expand kBTC's reach and utility across DeFi ecosystems.