According to an October 17 statement, Kraken has introduced a new wrapped Bitcoin product, kBTC, to tap into the rapidly expanding sector.
kBTC is a fully backed, cross-network compatible ERC-20 token that represents Bitcoin. Each kBTC is backed 1:1 by an equal amount of Bitcoin, securely stored under Kraken control, and has on-chain reserves available for public verification. The token has been audited by security firm Trail of Bits.
Kraken emphasized that the launch of kBTC is in line with the company's mission to accelerate the adoption of cryptocurrencies globally. This product leverages the strengths of Bitcoin while expanding its use cases to DeFi and other blockchain ecosystems. The company's launch partners include deBridge, Definitive, Gauntlet, ParaSwap, and Yearn.
Kraken said:
“kBTC provides a secure and fully backed solution that unlocks the unparalleled value and potential of Bitcoin across diverse ecosystems.”
kBTC can be used across decentralized applications (dApps) due to its compatibility with networks such as Ethereum and OP Mainnet. Kraken also plans to extend compatibility to other blockchain ecosystems, including non-EVM networks.
According to the latest on-chain data, the total supply of kBTC is 100 BTC, equivalent to approximately $6.75 million. Of this, 80 kBTC is in circulation on the Ethereum network and held by 17 wallets. The remaining 20 kBTC resides on the OP mainnet with 11 holders.
WBTC competition intensifies
Kraken's entry into the wrapped Bitcoin space is a competitive move in the market as it seeks to challenge the dominance of BitGo's Wrapped Bitcoin (WBTC), which currently controls 90% of the market with a market capitalization of $10 billion. It was carried out in the midst of an intensifying situation.
In September, Coinbase launched its own wrapped Bitcoin, cbBTC, on top of Ethereum and Base. Around the same time, 21.co, the parent company of 21Shares, released a wrapped Bitcoin product, 21BTC.
The recent surge in wrapped Bitcoin products began after BitGo announced a controversial partnership in August with BiT Global, a Hong Kong-based company with ties to Tron founder Justin Sun. .
The move raised concerns among some in the crypto community, particularly regarding Sun's involvement. As a result, DeFi protocols such as Sky (formerly MakerDAO) and Aave are considering discontinuing support for WBTC on their platforms.
