New Ethereum-Based Token to Be Backed by Bitcoin

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U.S.crypto wallet and blockchain security firm BitGo has announced the development of an Ethereum (ETH)-based coin backed 1:1 with Bitcoin (BTC), according to an official blog post Friday, Oct. 26.

New Ethereum-Based Token to Be Backed by Bitcoin

The announcement reads that Wrapped Bitcoin will provide users with a “wide variety of new decentralized use cases including on decentralized exchanges (DEXs), as collateral for stable coins or lending, for payments and flexible smart contracts within the Ethereum ecosystem.”

Major decentralized projects like Kyber Network, Gnosis, MakerDAO, and others will power the launch of the new ERC-20 coin’s first major use cases in January 2019, according to the announcement.

Describing the upcoming coin as a “transformational community effort,” BitGo claimed that the new token will bring the “stability and value” of major cryptocurrency Bitcoin to make cryptocurrencies applicable for businesses on the Ethereum blockchain.

BitGo said that the company introduced the new digital asset with “full proof of reserve” following “significant institutional interest” in tokenization of assets like securities, commodities, and real estate.

According to the statement, every Bitcoin will be accounted for on a dashboard displaying addresses and balances, and users will be able to verify each Bitcoin held in custody on the blockchain, which is available for monitoring via Etherscan.

In early September, BitGo acquired a state trust company charter in South Dakota to become a certified cryptocurrency custodian. As a custodian, BitGo will be subject to regulatory oversight in compliance with know your customer (KYC) and anti-money laundering (AML) policies.