Crypto custodian BTSE has launched an ERC-20 token that represents Monero (XMR) on the Ethereum blockchain, giving investors new exposure to the privacy-centric coin.

Represented by the ticker symbol WXMR, Wrapped Monero is intended to bring greater liquidity to the DeFi ecosystem. The new nugget is fully backed by Monero at a ratio of one-to-1 and is secured past BTSE.

In a press release that was shared with Cointelegraph, BTSE said WXMR "gives holders of Monero more flexibility to utilize their tokens without having to sell it for Ethereum or stablecoins, in club to access the many exciting opportunities in the DeFi space."

Monero represents ane of crypto's nigh compelling utilise cases, and its proponents view XMR as fulfilling one of the cadre tenants of decentralized networks: privacy guarantees.

Although governments take been steadily embracing digital assets like Bitcoin (BTC) and Ether (ETH), they've been much more critical of privacy coins like XMR and Zcash (ZEC). Weary of Know Your Customer and Anti-Money Laundering regulations, exchanges have been delisting privacy coins to ensure they don't run afoul of the law.

Recently, Bittrex became the latest high-contour exchange to delist privacy coins, including XMR.

In this sense, BTSE says Monero's greatest strength — strong privacy features — is sometimes viewed equally a disadvantage. By holding Wrapped Monero, users tin can provide the transparency needed to satisfy KYC/AML requirements that are becoming increasingly ubiquitous in crypto trading.

Responding to criticism that a wrapped version of Monero negates its privacy use case, BTSE told Cointelegraph:

"It does not betray the privacy of Monero, considering this is an optional way for users to unlock liquidity without selling their Monero."

If the wrapped version of Bitcoin is any indication, Monero could get a boost from WXMR. Wrapped Bitcoin (WBTC) allows people to apply BTC as collateral on the Ethereum blockchain, a motion that has fueled the DeFi blast.

In the instance of WBTC, at that place has been more than menstruum-through from DeFi to Bitcoin's price, according to Sam Bankman-Fried of Alameda Enquiry. It remains to be seen whether a like flow-through will do good XMR's value.