The Bitcoin Association Switzerland announced the launch of a new Bitcoin-backed payment token on Tezos blockchain, called tzBTC, a token type that has recently started gaining prominence.
What is tzBTC?
The token, announced on Wednesday, is backed one-to-one by Bitcoin and follows the FA1.2 token standard of the Tezos blockchain. The token will be able to interact natively with the decentralized applications on the Tezos network which opens up new opportunities in the world of decentralized finance.
Bitcoin Association said that it is the first smart contract application focused on decentralized finance built on Tezos mainnet. Both Tezos Foundation and Bitcoin Association have worked on developing the token and Bitcoin Swiss has been named as the project gatekeeper.
The project also witnessed participation from four Swiss companies- Taurus Group SA, Swiss Crypto Tokens AG, inacta AG and LEXR AG. All will act as project keyholders. The companies will be authorized to mint and burn the tzBTC tokens. The activity will be regulated by the Bitcoin Association Switzerland.
A regulated token offering
Head of Bitcoin Association Switzerland, Lucas Betshart said that the token will be regulated under Swiss laws. He added,
“The tzBTC brings the brand and liquidity of Bitcoin to the Tezos blockchain and gains the potential for rich functionality made possible by Tezos smart contracts.”
The official website of the project states, “tzBTC brings the liquidity and battle-tested brand of Bitcoin (BTC) into the Tezos ecosystem, enabling BTC-backed use-cases on Tezos. Developers on Tezos can use tzBTC to enable novel financial applications on the Tezos blockchain.”
The gatekeepers of the projects will be participants that accept Bitcoin from users and allocate tzBTC to them in return. The work will be done by Taurus, cryptocurrency bank Sygnum, Bitcoin Suisse, and market maker Woorton. The keyholders in the project will work as custodians.
In recent months, several projects working on decentralized finance (DeFi) are springing up. They are working on Wrapped Bitcoin (WBTC) concept which has become popular on platforms like dYdX, Compounds and bZx.