21.co Launches Wrapped Bitcoin on Ethereum
Date: 2024-09-04 Author: Henry Casey Categories: BUSINESS
21.co, the parent company of crypto asset manager 21Shares, is launching its own wrapped bitcoin — 21.co Wrapped Bitcoin (21BTC) — on the Ethereum blockchain network, according to a Sept. 3 announcement.
The launch of 21BTC expands the existing lineup of wrapped tokens on Ethereum, including Avalanche, Polkadot, and Solana wrapped tokens. 21.co launched 21BTC on Solana in May, the company said.
Wrapped Bitcoin is designed to “bring rigorous asset management best practices… to the world of wrapped assets,” including “institutional custodians and security protocols,” said Eliezer Ndinga, head of strategy and business development for digital assets at 21.co.
21.co says its user protections include cold storage and regulated third-party custodians. The company is partnering with market maker Flow Trader to manage the issuance of 21BTC. Wrapped Bitcoins are ERC-20 tokens or other types of smart contract-compatible tokens that are backed by Bitcoin.
21.co’s announcement comes amid criticism of rival wrapped BTC, Wrapped Bitcoin (wBTC), over its custodian BitGo’s planned partnership with BiT Global, which would give the Hong Kong-based crypto exchange partial custody of wBTC collateral. Wrapped Bitcoin (wBTC) is the most popular wrapped bitcoin, with a market cap of nearly $9 billion, according to CoinMarketCap.
BitGo's announcement "sparked controversy due to Justin Sun's involvement, with many concerns in the ecosystem regarding his "related projects that show troubling signs of possible misuse" of collateral," decentralized finance (DeFi) protocol Threshold said in its governance proposal on August 29.
21.co is best known for its subsidiary 21Shares, which issues cryptocurrency exchange-traded funds (ETFs), including the ARK 21Shares Bitcoin ETF (ARKB) and the 21Shares Core Ethereum ETF (CETH).
Wrapped Bitcoin "serves as a critical source of collateral and enables a wide range of financial transactions such as lending, borrowing and trading," said Michael Lee, global head of digital assets at Flow Trader.
21.co's wrapped Bitcoin "provides improved liquidity and improved interoperability across different blockchain networks," he added.
