Crypto exchange Kraken launches its own cross-network-compatible ERC-20 representation of Bitcoin

In an Oct. 17 blog post, Kraken unveiled its wrapped bitcoin variant called kBTC — each of which will be  fully backed 1:1 by an equivalent amount of actual

Crypto exchange Kraken has launched its own cross-network-compatible ERC-20 representation of Bitcoin.

According to an Oct. 17 blog post, Kraken has unveiled its wrapped bitcoin variant dubbed kBTC — each fully backed 1:1 by an equivalent amount of actual Bitcoin custodied by the exchange.

Kraken's custody unit, known as Kraken Financial, is a Wyoming-chartered Special Purpose Depository Institution. The kBTC smart contract has also undergone an audit by Trail of Bits, an external security firm.

“kBTC builds upon Bitcoin’s fundamental strengths – security, scarcity and its role as a store of value – and extends its utility further, into DeFi and beyond,” Kraken stated.

The new token will be cross-chain compatible, allowing for its integration into Ethereum, OP Mainnet and potentially even certain non-EVM (Ethereum Virtual Machine) compatible ecosystems, Kraken noted.

Kraken is not the first crypto exchange to launch its own version of wrapped bitcoin. Last month, Coinbase unveiled cBTC — a tokenized version of Bitcoin on both Ethereum and its Layer 2 network. 21Shares also launched a wrapped bitcoin product called 21BTC on Ethereum.

BitGo was among the original creators of the WBTC (Wrapped Bitcoin) token that launched in January 2019. WBTC became the largest Bitcoin-based ERC-20 token deployed in decentralized finance (DeFi), with native integrations on several chains including Ethereum, Tron, Osmosis and Base.

The firm faced scrutiny earlier this year after BitGo custody was shifted to a multi-jurisdictional joint venture with BiT Globall, which is linked to Tron founder Justin Sun.

Earlier this month, BitGo completed the transition to a multi-jurisdictional custody setup. WBTC remains the largest version of tokenized Bitcoin with a market capitalization of $10 billion.