Ethereum has a new stablecoin, and it’s backed by Bitcoin
“Wrapped BTC” is now live on the Ethereum blockchain
Last night, developers officially launched a new stablecoin that was first unveiled last October. “Wrapped BTC” (WBTC) is an ERC-20 token that was created from a collaboration between Kyber Network and Republic Protocol, both decentralized cryptocurrency exchanges, along with crypto custody company BitGo. It is billed as having “the stability of Bitcoin and the flexibility of Ethereum.”
The idea behind WBTC is to offer a digital currency that will provide greater liquidity to the Ethereum ecosystem, as well as decentralized exchanges and financial applications. According to CoinMarketCap, there are already 72,414 EBTC on the Ethereum blockchain collateralized by 72.4216 BTC (around $250,000), which is locked in custody on the BTC network.
Atomic swaps, financial transactions that allow for crypto exchanges across different blockchains, allow Ethereum users to request WBTC from certified merchants, provided they first undergo mandatory anti-money laundering and Know Your Customer identification procedures. These merchants are considered to be “the institution or party to which wrapped tokens will be minted to and burnt from,” according to the WBTC white paper.
Eight merchants are already onboard, including AirSwap, ETHfinex, Kyber Network, Dharma, Set Protocol, GOPAX, Ren and Prycto.
Despite some reservations among the crypto community about the new offering, WBTC developers are confident that it will receive significant support in the markets. The company states, “The fundamental design of WBTC and the continuing commitment of all member to openness will form the essential building blocks for a transparent process framework and governance structure… WBTC will remain a firmly community-led initiative.”