Kraken Launches kBTC
October 18, 2024
The American cryptocurrency exchange Kraken has announced the launch of its token kBTC—a version of wrapped Bitcoin—which will allow users to interact with cryptocurrencies on a new level. According to representatives of the platform in an interview with CoinDesk, kBTC will operate on the Ethereum blockchain and in the L2 network OP Mainnet (Optimism).
Kraken Financial, the US-regulated division of the exchange, will act as the custodian for the token, ensuring full transparency through a public address of a segregated wallet. This solution will allow users to verify at any time that each issued kBTC is fully backed by real Bitcoin.
DeFi opportunities and competition with WBTC
ERC-20 standard tokens will become an excellent tool for Bitcoin holders, allowing them to leverage their assets in the decentralized finance (DeFi) sector. Currently, WBTC from BitGo dominates this segment with a market cap of around $9.9 billion. However, WBTC has faced difficulties following a strategic partnership with the Tron-associated project BiT Global—this deal raised concerns due to Justin Sun's involvement.
“While competitors sort out their issues, Kraken has secured support from leading DeFi projects such as ParaSwap, Yearn, deBridge, CowSwap, Velodrome, Curve, and Morpho, promising a wide range of opportunities for kBTC users. Meanwhile, the exchange does not plan to launch a spot market for the new token—users will be able to convert kBTC into Bitcoin and trade the underlying asset.
Kraken's strategy and vision
The minimum deposit for the wrapped coin will be 0.00026 BTC (approximately $17 at the time of writing), making it accessible for most users.
Mark Greenberg, Kraken's Director of Global Asset Development, noted that the launch of kBTC is part of the company's long-term strategy for developing decentralized finance and applications (dApps). “We see the future of on-chain technologies, and DeFi is the key to its realization,” he emphasized.
Kraken is ready to compete with other exchanges, and with the release of kBTC to the market, users will be able to experience the new advantages of decentralized finance today.