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BitGo to introduce an Ethereum based token to be backed by Bitcoin

by Safdarali Rizvi
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In an official blog post, published on Friday, October 26th, U.S. crypto wallet and blockchain security firm BitGo made an announcement stating that it has begun developing an Ethereum (ETH)-based coin backed 1:1 with Bitcoin (BTC).

In the Blog Post, BitzGo explains that this upcoming “Wrapped Bitcoin” shall present its users with a “wide variety of new decentralized use cases that include on platforms like decentralized exchanges (DEXs), as collateral for lending or stable coins, for flexible smart contracts and payments within the Ethereum ecosystem.”

As per the announcement, in a bid to boost the launch of the new ERC-20 coin’s first major use cases, many well-reputed decentralized projects like Gnosis, MakerDAO and Kyber Network and others would provide the necessary guidance.

BitGo has made an ambitious claim stating that the new token would add more “value and stability” for Bitcoin and in turn make cryptocurrencies applicable for businesses on the Ethereum blockchain, the company has also gone on to describe the upcoming coin as a “transformational community effort.”

In an official statement, BitGo stated that new digital asset was launched with “full proof of reserve” after the company received “significant institutional interest” in tokenization of assets like commodities, real estate and securities.

The statement also explained that, it would be possible for every user to verify every single Bitcoin held in custody on the blockchain and in addition to that every Bitcoin shall be accounted for on a dashboard displaying balances and addresses and balances, and users will be able to verify each Bitcoin held in custody on the blocks available for monitoring via Etherscan.

In order to become a certified cryptocurrency custodian, back in September BitGo went on to acquire a state trust company charter based out of South Dakota. What this means is BitGo is now eligible to regulatory oversight in compliance with anti-money laundering (AML) as well as know your customer (KYC) policies.

 

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