Kraken advances crypto with its Wrapped Bitcoin (KBTC) token, designed to boost BTC’s usability by enabling compatibility with Ethereum and Optimism networks.
Unlike the original Bitcoin, kBTC is an ERC-20 token that is fully backed by Bitcoin and can be easily used in decentralized finance (DeFi) apps. Kraken contributes to openness by providing on-chain confirmation of the reserves supporting kBTC and securely storing the Bitcoin. At launch, there were 100 BTC reserves, of which 80% went to Ethereum and 20% to OP Mainnet.
Using kBTC to Increase the Role of Bitcoin in DeFi
With the introduction of kBTC, Kraken aims to bridge the gap in utility between other blockchain platforms and Bitcoin. By taking this step, clients can utilize Bitcoin for broader financial functions than just its traditional store-of-value role. It also makes Bitcoin more visible in DeFi.
The availability of the token on other networks is likely to stimulate innovation because it allows developers to explore new applications for Bitcoin among a variety of decentralized apps. Kraken has emphasized that the security and dependability of the Wrapped Bitcoin token system will be guaranteed by its 13-year industry experience, given the high confidence level needed for such wrapped assets.
Despite the platform’s promise, Kraken has stated that kBTC spot markets will only be available after launch. Nonetheless, users will always have the option to convert their kBTC back into Bitcoin, adding even more flexibility to their currency’s use.
To increase kBTC’s relevance and compatibility in DeFi systems, Kraken plans to integrate it with other blockchain platforms gradually. With this debut, Kraken becomes a significant player in expanding the use and accessibility of Bitcoin, especially in the rapidly developing Web3 ecosystem.
However, Kraken continues to emphasize that it is present in global markets. Before then, CNNF said that Kraken had acquired a license in Bermuda, allowing it to offer more than 200 contracts for regulated bitcoin derivatives trading.
Crypto companies are increasingly drawn to Bermuda due to its transparent legal system and progressive views on digital assets, complementing Kraken’s global service diversification approach.