Crypto exchange Kraken has launched its own wrapped Bitcoin token, kBTC. This token will be available on both Ethereum and OP Mainnet, and is backed 1:1 with Bitcoin, according to a company spokesperson.

The Bitcoin that backs kBTC will be held securely in Kraken Financial, which is the U.S. custody solution for the exchange, in a segregated wallet. An address for this wallet will be publicly disclosed, allowing customers to verify that the Bitcoin is fully reserved.

Wrapped tokens allow unsupported cryptocurrencies like Bitcoin and Ether to be traded, lent, and borrowed on DeFi platforms. For instance, WBTC is a widely-used wrapped version of Bitcoin that is integral to lending on DeFi platforms with a market cap around $10 billion.

Recent developments in the market have seen several exchanges offering their own wrapped Bitcoin tokens. For example, rival exchange Coinbase recently introduced its own wrapped Bitcoin product called cbBTC on Ethereum and Base networks.

At launch, kBTC will have support across important DeFi applications, with partners including Kraken, Kraken Wallet, Ethereum, Optimism, Paraswap, and others.

The kBTC token aims to promote the adoption of decentralized finance, with a minimum deposit requirement set at 0.00026 BTC, approximately $15 based on a Bitcoin price of $60,000.

"We believe in an onchain future and DeFi represents a key part of that opportunity," stated Mark Greenberg, Kraken's Global Head of Asset Growth and Management. "kBTC relies on Kraken's long history of seamless UX and top-of-the-range security, bringing DeFi to new users and accelerating the adoption of decentralized applications."