A synthetic version of the privacy currency XMR has been released on the Ethereum network.
The crypto custodian BTSE launched an ERC-20 token representing Monero (XMR) on the Ethereum blockchain, giving investors new exposure to privacy-centric currency.
Represented by the WXMR symbol, the Wrapped Monero, or synthetic Monero, aims to bring greater liquidity to the DeFi ecosystem. The new asset is fully guaranteed by Monero in the proportion of one to one and is guaranteed by BTSE.
In a press release that was shared with the Cointelegraph, BTSE said that WXMR “gives Monero holders more flexibility to use their tokens without having to sell them for Ethereum or stablecoins in order to access the many interesting opportunities in the DeFi space.
Monero represents one of the most attractive use cases of cryptomaps and its proponents see XMR as one of the exponents of one of the main flags of decentralized networks: privacy.
Although governments have constantly adopted digital assets such as Bitcoin Code (BTC) and Ethereum (ETH), they have been much more critical of privacy currencies such as XMR and Zcash. Concerned about KYC and anti-money laundering regulations, exchanges are removing privacy currencies to ensure they do not violate the law.
Recently, Bittrex has become the latest high profile exchange to remove privacy currencies, including XMR.
In this regard, BTSE says that Monero’s greatest strength – strong 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 ubiquitous in the industry.
If the synthetic version of Bitcoin is successful, Monero could receive a boost from WXMR. The synthetic Bitcoin, or WBTC, allows people to use the BTC as collateral in the blockchain Ethereum, a move that fed the DeFi boom.
In the case of the WBTC, there was more DeFi flow for the price of Bitcoin, according to Sam Bankman-Fried from Alameda Research. It remains to be seen if a similar flow will benefit the value of the XMR.