Hex Trust Brings Licensed Custody to Flare's XRP Ecosystem
Hex Trust, a licensed digital asset custodian based in Asia, has announced a strategic partnership with Flare Networks to provide institutional clients with direct access to XRP-based decentralized finance. The integration allows institutions to mint FXRP (Flare's wrapped XRP token) and stake FLR tokens while keeping their underlying assets under Hex Trust's regulatory-compliant custody infrastructure.
The partnership addresses one of the most significant barriers to institutional DeFi adoption: the requirement to move assets out of secure, audited custody environments to participate in on-chain yield opportunities. With this integration, institutional investors can now engage with Flare's DeFi ecosystem without sacrificing the compliance and security frameworks their operations require.
Why Institutional Custody Matters for XRP DeFi Growth
The XRP ecosystem has seen substantial growth following regulatory clarity in multiple jurisdictions. However, institutional participation has remained limited due to custody concerns. Traditional finance entities, hedge funds, and asset managers typically operate under strict mandates requiring assets to be held with licensed custodians.
Hex Trust holds licenses in Singapore, Hong Kong, Dubai, and France, making it one of the most geographically diverse licensed custodians in the digital asset space. This regulatory coverage means institutions across Asia, the Middle East, and Europe can now access Flare's XRP DeFi products without violating their compliance requirements.
Flare Networks has positioned itself as the primary DeFi layer for XRP, offering smart contract functionality that the XRP Ledger itself does not natively support. The network uses its FAssets protocol to create trust-minimized representations of assets from non-smart contract chains, with FXRP being the flagship product for XRP holders.
How the FXRP Minting Process Works Under Custody
The technical implementation involves Hex Trust operating as a qualified custodian while facilitating FXRP minting through Flare's FAssets protocol. Here's the workflow:
- Institutional clients deposit XRP with Hex Trust
- Hex Trust locks the XRP in segregated custody accounts
- FXRP tokens are minted on Flare Network at a 1:1 ratio
- Clients can deploy FXRP across Flare DeFi protocols
- Redemption reverses the process, burning FXRP and releasing XRP
The custody arrangement ensures that the underlying XRP never leaves Hex Trust's control, even while the tokenized representation circulates on Flare. This architecture differs from typical wrapped token bridges where assets move to smart contract-controlled addresses.
FLR staking offers an additional yield layer. Institutions can stake their FLR holdings to secure the Flare Time Series Oracle (FTSO) and earn staking rewards. Current FTSO delegation yields vary based on network participation but have historically ranged between 5% and 15% APY.
What This Means for Institutional XRP Allocation
For portfolio managers considering XRP exposure, the Hex Trust integration creates several new strategic options:
Yield Enhancement: Rather than holding XRP as a static position, institutions can now mint FXRP and deploy it into lending protocols or liquidity pools on Flare. This transforms a non-yielding asset into a productive one.
Diversified Exposure: The ability to stake FLR provides exposure to Flare's oracle and data infrastructure play without taking direct FLR price risk through spot purchases.
Compliance Documentation: Hex Trust provides the audit trails, reporting, and compliance documentation that institutional back offices require. This includes proof of reserves, transaction histories, and custody attestations.
The timing aligns with broader institutional interest in XRP following the resolution of the SEC's lawsuit against Ripple. Several traditional finance entities have publicly discussed XRP allocation strategies, and the custody infrastructure from Hex Trust removes a significant operational barrier.
Broader Implications for Cross-Chain Institutional DeFi
This partnership signals a maturing trend in how institutional capital will interact with DeFi protocols. Rather than building parallel permissioned systems, the industry is converging on a model where licensed custodians serve as the bridge between regulated entities and permissionless networks.
Flare's approach with FAssets is particularly notable because it targets assets from chains without native smart contract support. Beyond XRP, the FAssets protocol roadmap includes Bitcoin (FBTC), Litecoin (FLTC), and Dogecoin (FDOGE). If the Hex Trust model proves successful with FXRP, expansion to these other assets seems likely.
For crypto card users and everyday participants, especially those earning cashback rewards, institutional inflows typically correlate with improved liquidity and tighter spreads. As more capital enters the XRP DeFi ecosystem through channels like Hex Trust, the downstream effects should include more efficient markets and potentially new DeFi products designed for retail participants.
The partnership also validates Flare's positioning as the DeFi layer for non-smart contract chains. While competitors have attempted similar cross-chain bridges, the combination of enterprise-grade custody with native protocol integration represents a differentiated approach.
FAQ
What is FXRP? FXRP is a trust-minimized wrapped version of XRP that exists on Flare Network. It maintains a 1:1 backing with XRP and can be used across Flare's DeFi ecosystem for lending, liquidity provision, and other yield strategies.
Do I need to use Hex Trust to access Flare DeFi? No. Retail users can access Flare DeFi directly through self-custody wallets. The Hex Trust integration is specifically designed for institutional clients who require licensed custody arrangements.
What licenses does Hex Trust hold? Hex Trust operates under regulatory licenses in Singapore (MAS), Hong Kong (SFC and TCSP), Dubai (VARA), and France (PSAN registration). This multi-jurisdictional coverage allows them to serve institutional clients across Asia, Middle East, and Europe.
What yields are available on Flare? FLR staking through FTSO delegation has historically offered 5-15% APY depending on network conditions. FXRP yields vary based on which DeFi protocols are used and current market rates.
Overview
Hex Trust's partnership with Flare Networks marks a significant milestone for institutional XRP DeFi access. By enabling FXRP minting and FLR staking under licensed custody, the integration removes the compliance barriers that have kept traditional finance on the sidelines. As regulatory frameworks continue to mature and more custodians adopt similar models, expect institutional participation in cross-chain DeFi to accelerate throughout 2026.
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