A wrapped version of the XMR privacy currency was released on the Ethereum network.
BTSE cryptomoney custodian has launched an ERC-20 token representing Monero (XMR) in the Ethereum block chain, giving investors a new privacy-focused exposure to the currency.
Represented by the trading symbol WXMR, Wrapped Monero is intended to provide greater liquidity to the DeFi ecosystem. The new asset is fully backed by Monero on a one-to-one basis and is insured by BTSE.
In a press release shared with Cointelegraph, BTSE said that WXMR „gives Monero holders more flexibility to use their tokens without having to sell them for Ethereum or stable currencies, in order to access the many exciting opportunities in the DeFi universe.
Monero represents one of the most compelling use cases of cryptomonies, and its proponents believe that XMR meets one of the primary tenants of decentralized networks: privacy guarantees.
While governments have consistently adopted digital assets such as Bitcoin (BTC) and Ethereum (ETH), they have been much more critical of privacy currencies profit secret such as XMR and Zcash. Tired of know-your-customer protocols and anti-money laundering regulations, exchanges have eliminated privacy coins to ensure they don’t violate the law.
Recently, Bittrex became the latest high-profile exchange to eliminate privacy coins, including XMR.
In this regard, BTSE says that Monero’s greatest strength – robust privacy features – is sometimes seen as a disadvantage. By maintaining Wrapped Monero, users can provide the transparency needed to meet the KYC/AML requirements that are becoming increasingly pervasive in cryptomoney trading.
If the wrapped version of Bitcoin is an indication, Monero could get a boost from WXMR. Wrapped Bitcoin, or WBTC, allows people to use BTC as collateral in the Ethereum block chain, a movement that has driven the rise of DeFi.
In the case of WBTC, there has been a greater flow of DeFi at the price of Bitcoin, according to Sam Bankman-Fried of Alameda Research. It remains to be seen whether a similar continuous flow will benefit the value of XMR.