Hex Trust announced its plan to issue and manage wrapped XRP, a new token designed to facilitate the movement of XRP across multiple blockchains while remaining fully backed by the original asset at a 1:1 ratio. Based in Hong Kong, Hex Trust aims to enhance the utility of XRP beyond its native ledger by allowing it to be integrated into decentralized finance (DeFi) applications on networks such as Ethereum, Solana, Optimism, and HyperEVM.
This new token, known as wXRP, is set to increase accessibility for users seeking a regulated method to transfer and utilize XRP across various blockchain ecosystems. Ripple’s Chief Technology Officer, David Schwartz, expressed his approval of the initiative on social media, emphasizing that expanding the reach of XRP enhances its utility while the XRP Ledger continues to serve as a foundational element.
Hex Trust is launching wXRP with an impressive total value locked of over $100 million, ensuring liquidity from the outset. Each wXRP will only be issued when an equivalent amount of native XRP is deposited into regulated custody, with the original XRP being burned upon redemption. This mechanism guarantees the 1:1 backing of the wrapped token.
Authorized merchants will have the ability to mint and redeem wXRP through a streamlined automated process, which is designed to maintain compliance with relevant regulations. Moreover, users will be able to access various DeFi features when they are supported, including engaging in liquidity pools and earning rewards.
In an innovative move, wXRP will be tradable with Ripple’s stablecoin, RLUSD, across Ethereum and other compatible networks. Markus Infanger, senior vice president at RippleX, noted that there is a growing demand for cross-ecosystem uses of XRP and that the wrapped token aligns with the company’s objective to broaden regulated access to DeFi.
Security and compliance are paramount considerations. Hex Trust clarified that the underlying XRP will be stored in regulated, segregated custody accounts that adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. By utilizing LayerZero’s OFT standard for cross-chain transfers, the wrapped token aims to provide a secure alternative to unregulated bridges, which have been susceptible to hacks.
In terms of its functionality, wrapped XRP (wXRP) serves as a representation of XRP on alternative blockchains, allowing for its use in DeFi applications while being securely backed. Unlike standard XRP, which operates predominantly on its own ledger, wXRP can be utilized across various platforms, thereby expanding its applicability in financial markets.
Widespread adoption and trust in wXRP are bolstered by its compliant management and the safeguards that reduce the risks commonly associated with unregulated cross-chain transfers. Authorized merchants will carry out the process of converting native XRP into wrapped XRP, ensuring a secure and efficient transaction experience for users.
