Monero comes to Ethereum to give transparency to private cryptocurrency

The exchanges BTSE launched a token in Ethereum (ETH) that seeks to create a transparency framework in operations involving monero (XMR) in exchange houses. The idea is to create a market with a cryptocurrency that has parity with XMR, with the aim of allowing regulators to monitor these operations and that the traders can trade a token that has the value of monero on the DeFi markets.

The information was released on January 6 through the blog of BTSE, where it is explained that the “wrapped” token is called WXMR and will be protected by the exchange.

It was also reported that the process for the issuance and distribution of the WXMR token will be done through a “test of reserves.” This test allows the exchange to create each token in correspondence with the funds in custody, since each token issued is equivalent to one monero deposited in the exchange.

According to the post, it is as simple as depositing XMR in the exchange and use the conversion function to exchange it for the “wrapped” token or vice versa. According to BTSE, “periodic standby cryptographic tests will be released.”

BTSE allows entry and exit operations of the WXMR contract. Fountain: BTSE / btse.com

The launch of BTSE addresses the dilemma that arises between the interests of the exchanges and those of regulators and state agencies, who seek to know the origin of the funds mobilized in networks focused on privacy. Monero, precisely, allows you to hide the sender, recipient and the funds involved in a transaction.

In recent days, Bittrex announced that its clients had funds in XMR, ZEC and DASH they had to withdraw them before January 15, 2021This fact was not well received in the ecosystem and even generated confusion. The decision appears to obey the requirements of regulators, who supposedly seek greater transparency in operations through measures such as the implementation of identity controls (KYC) and anti-money laundering (AML).

BTSE points out, then, that regulators could find a greater ease of supervision in transactions that are registered in a public blockchain such as Ethereum or Bitcoin, as will happen with the wrapped token WXMR.

On the subject, and ironically, Riccardo Spagni, former main developer of Monero, challenged Bittrex in a Tweet which alluded to the BTSE announcement: “Hey @BittrexExchange @BittrexGlobal @BittrexUS, are you going to include WXMR? It’s traceable, so they should have no problem including it. “

With the rise of discussions about the control of privacy on the Internet, the idea spread that cryptocurrencies such as monero, zcash (ZEC) and even DASH allowed criminals to conduct illegal operations on the Internet. dark web, especially money laundering. However, recent reports from CryptoNews contrast with this view, pointing out that existing regulations could be enough to limit criminal behavior, even with privacy-focused coins.

Monero on Ethereum DeFi markets

One of the arguments for the creation of the WXMR token is precisely to increase its liquidity through the DeFi Ethereum markets. Nowadays XMR exceeds 2.9 billion market capitalization, according CoinMarketCap.

Monero’s market capitalization is around $ 2.9 billion. Source: CoinMarketCap.

In fact, since the middle of last year, some users of Reddit had raised the possibility of XMR reaching the DeFi markets as it had already happened with bitcoin (BTC): “This would be great, as it is difficult for many people to access a way to obtain XMR because many exchanges they do not include them due to their privacy nature, “commented MasterTheGame on Reddit.

This expectation grew in November 2020, when the WBTC tokens locked in Ethereum amounted to $ 3 billion. As of this writing, the trading volume of the new WXMR token against ETH is USD 52.877, according to data from Uniswap.

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Monero comes to Ethereum to give transparency to private cryptocurrency

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