Edit: As others stated, using a VM’s internal storage as a backup destination is probably not what you want. Answer below assumes that a VM like sys-usb is used to attach external storage devices.
It matters most where the encryption is handled. With qubes-backup its always done in dom0, so you can send to other VMs/drives without worry.
With Wyng, its still ‘bring your own encryption’, so using an encrypted drive makes the most sense. In that case, you can see the example in the Wyng announcement post or the Readme, which decrypts the drive in dom0 even though its connected to sys-usb.