glossary ·

Wrapping / wrapped tokens

Converting an asset into a tokenized representation on another standard or chain (e.g. BTC → WBTC) — may be a taxable disposal.

Wrapping / wrapped tokens — crypto tax glossary (EN)

Wrapping creates a tokenized representation of an asset (often to use it in DeFi). Some tax authorities treat wrap/unwrap as a disposal and acquisition; others may see it as a non-taxable reorganization — guidance is inconsistent globally.

Default conservative approach in software is often to treat wraps as taxable swaps unless local rules say otherwise.

Educational definition — not tax advice. Rules vary by country.

Read next