Hex Trust plans to issue and custody wrapped XRP, according to a report from The Block. The announcement describes an effort to let XRP token value be represented on other chains so it can take part in decentralized finance protocols.
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What the announcement says
The Block reported that Hex Trust will create a wrapped version of XRP and hold the underlying asset in custody to back the token. The report framed the step as a way to move XRP liquidity into environments that support smart contracts, giving holders access to lending, trading, and other DeFi primitives on chains that do not natively host XRP.
How wrapped tokens operate
Wrapped tokens function by representing one asset on a different chain through a token contract. In this model, a custodian takes custody of the native asset and issues a token that mirrors its value on another network. Wrapped XRP would be intended to trade 1:1 with XRP held in reserve, letting users interact with smart contracts without moving the original ledger entry.
This approach has precedent in other bridged assets. Custodial issuance is one common method, and it places trust in the custodian’s reserves, accounting, and operational security. For market participants and developers, the practical result is the ability to use an asset across environments that otherwise are incompatible.
Why this matters for DeFi
Bringing XRP into smart-contract ecosystems can expand available liquidity for decentralized exchanges, lending platforms, and automated market makers. If wrapped XRP gains adoption, it could increase trading pairs and collateral options on chains where XRP is currently absent. DeFi protocols rely on transferable, composable tokens; a wrapped representation makes XRP eligible for those functions.
From the perspective of users and applications, the shift is largely about access. Developers gain another asset to build around, and users gain another option for yield or credit. The precise impact depends on adoption by integrators and the level of trust placed in the custodian and the token’s smart-contract implementation.
Custody, transparency and risk considerations
Custodial issuance brings specific responsibilities. The custodian must maintain reserves, provide verifiable accounting, and secure the assets from operational and cyber risks. Hex Trust, as the named custodian in the report, will need to demonstrate controls that reassure counterparties and users. Custody integrity is a core determinant of how widely a wrapped asset is accepted.
Market participants often look for auditability or public attestation of reserves and for transparent redemption mechanics. When a single entity holds the native asset, users must trust that redemptions and conversions operate as advertised and that reserves are not otherwise encumbered.
Implications for wallets and on-chain access
Crypto wallets and custodial services will likely be the first integration points for wrapped XRP. Wallet providers that support tokens across multiple networks could list the wrapped token as an asset, enabling users to hold and transfer it on chains that host smart contracts. Crypto wallets that already support wrapped assets may add wrapped XRP to provide continuity for XRP holders seeking DeFi exposure.
For on-chain activity, users will interact with the token contract on the destination chain. That means developers and analytics providers must monitor token flows, liquidity pools, and contract interactions to evaluate market depth and user behavior. Observers of decentralized markets will watch redemption patterns and cross-chain movements to assess confidence levels.
What analysts and tools will track
Crypto analytics firms and on-chain tooling will play a role in forming public confidence. Data on token supply, reserve transparency, and cross-chain flows will be critical to understanding how much wrapped XRP circulates relative to the native reserve. Crypto analytics providers can surface discrepancies and patterns that signal risk or adoption trends.
Beyond raw numbers, on-chain metrics such as active addresses, liquidity locked in pools, and trading volume will help market participants judge whether wrapped XRP contributes meaningful liquidity to DeFi. Timely and transparent data will matter to integrators that consider adding the asset to their protocols.
Regulatory and market context
Issuing a wrapped version of a token involves legal and regulatory questions that vary by jurisdiction and by the custodian’s charter. Custodians often operate under specific licensing and compliance regimes. The report named Hex Trust in the role of custodian, which places operational responsibility on the firm and its compliance framework.
Market makers, exchanges, and institutional participants will evaluate the offering with regulatory compliance and counterparty risk in mind. The broader market environment will influence how quickly integrators adopt wrapped XRP and whether liquidity follows at scale.
What to watch next
Key indicators to watch are formal announcements from the custodian about issuance mechanics, reserve attestations, and integration timelines. Industry observers will look for technical details about the token contract, redemption procedures, and partnerships with bridges or custodial networks. Announcements that include independent attestations or audits tend to reduce friction for adoption.
Other points of interest will be integration with major wallets and listings on decentralized exchanges. Tracking on-chain movements and liquidity metrics will show whether the wrapped token attracts use for swaps, lending, or collateral. Over time, those patterns will determine whether wrapped XRP meaningfully enters DeFi markets.
Bottom line
The Block’s report that Hex Trust will issue and custody wrapped XRP highlights a familiar route for bringing non-smart-contract assets into DeFi. The effort centers on custody practices, technical implementation, and market acceptance. Wrapped XRP could give XRP holders broader access to decentralized applications if the underlying custody and transparency expectations are met and if integrators choose to adopt the token.
Close observation of reserve attestations, token contract code, wallet integrations, and on-chain liquidity will tell whether this custodial issuance achieves meaningful utility for DeFi users. The coming weeks should clarify technical details and reveal the early market response reported by industry outlets.