How do you share encrypted data between an application and a WCF service?

Question

C++ / C#

Hello!
Please help to implement the following functionality. There is a WCF service. In her work, she uses the data received from the xml file. Data - logins and passwords for connecting to the database, which must be encrypted. To do this, it is proposed to write a program that will allow you to edit the file while encrypting it. That. there is a program that encrypts the file according to some algorithm and a service that must open this file by decrypting it. The question arises: what kind of encryption - symmetric or asymmetric - should be used to implement these requirements? Where to store the key - in the resources of the service and the resources of the application, or is there some other option? Is it permissible to store the key directly in the resources of that application (in this case, this is an application for editing an xml file with logins and passwords and a WCF service), which will then use it or is it better not to do so? And if not, then where to store the key?
Thanks in advance!