Ripple Custody Now Supports HBAR via Shared MPC Wallet, Study Finds

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Ripple Custody has officially expanded its institutional-grade digital asset management capabilities by integrating support for Hedera’s HBAR tokens. This development, validated through a peer-reviewed academic study published in the Future Internet journal, marks a significant milestone in cross-chain custody solutions for regulated financial institutions.

The research confirms that Ripple Custody’s Multi-Party Computation (MPC)-based wallet infrastructure can securely manage assets across multiple blockchains—including Ethereum, XRPL, and now Hedera—within a single, unified platform. This advancement enhances institutional flexibility in managing diverse crypto portfolios while maintaining strict compliance and operational security.

How Ripple Custody Enables Secure Cross-Chain Asset Management

At the heart of this innovation is a Threshold Signature Scheme (TSS), which eliminates single points of failure by distributing cryptographic key control among three parties: the client, the custody provider, and a wealth manager. No single entity holds full access to private keys, significantly reducing the risk of theft or unauthorized transactions.

This shared custody model ensures that institutions retain oversight without compromising security. Built-in compliance tools such as transaction whitelisting, withdrawal limits, and role-based authorization align with regulatory frameworks in regions like the U.S. and EU, making it ideal for hedge funds, private banks, and asset managers operating in highly regulated environments.

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These features are especially valuable for firms managing tokenized securities, digital bonds, and other blockchain-based financial instruments. By consolidating assets from different networks under one custody solution, institutions gain greater portfolio diversification and operational efficiency.

Decentralized Recovery Protocol Enhances Security

One of the standout innovations integrated into the wallet is DeRec, a decentralized recovery protocol. Unlike traditional recovery methods that rely on seed phrases—often vulnerable to loss or theft—DeRec encrypts recovery data and distributes it across decentralized helper nodes.

This means users never need to store or recall a 12- or 24-word recovery phrase. Instead, credential recovery is securely triggered when needed, using cryptographic proofs that prevent unauthorized access. The system maintains high availability without sacrificing decentralization or security, offering peace of mind for institutional operators managing large-scale digital asset holdings.

This approach not only reduces human error but also mitigates insider threats and phishing risks associated with centralized recovery systems. For regulated institutions, DeRec provides an auditable, tamper-resistant path to account restoration—critical during personnel changes or emergency scenarios.

Academic Validation Strengthens Institutional Trust

The study was conducted by researchers affiliated with the UCL Centre for Blockchain Technologies and the Exponential Science Foundation, both of which maintain collaborative relationships with Ripple and Hedera governance bodies. While these affiliations exist, the technical evaluation of the MPC architecture and DeRec implementation was rigorously peer-reviewed and published in an open-access academic journal.

This level of scholarly validation adds credibility to Ripple Custody’s claims, setting it apart from commercial announcements lacking third-party verification. The paper includes a detailed comparison table confirming Hedera as one of the supported networks—officially extending Ripple’s custody reach beyond Ethereum and XRPL ecosystems.

Such academic backing plays a crucial role in building trust among risk-averse financial institutions that require proven, auditable systems before adopting new technologies.

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Institutional Benefits: Compliance, Flexibility, and Control

With HBAR now supported, institutional investors can seamlessly integrate Hedera-based tokenized assets into their existing portfolios. Hedera is known for its high throughput, low fees, and enterprise-grade governance—making it a preferred choice for issuing stablecoins, central bank digital currencies (CBDCs), and supply chain tokens.

Ripple Custody’s platform allows these assets to be managed alongside XRP, ETH, and ERC-20 tokens without requiring separate custody arrangements. This cross-chain interoperability reduces complexity, lowers operational costs, and streamlines reporting and auditing processes.

Moreover, the platform supports advanced financial services such as staking, lending, and liquidity provisioning—all without transferring control to third parties like exchanges or custodial intermediaries. Revenue models include fees based on asset listings, assets under management (AUM), transaction volume, and performance incentives, aligning closely with traditional finance structures.

Frequently Asked Questions (FAQ)

Q: What is MPC in crypto custody?
A: Multi-Party Computation (MPC) is a cryptographic technique that splits private key ownership among multiple parties. No single participant holds the complete key, enhancing security by preventing single-point failures and reducing attack surfaces.

Q: Why is HBAR support important for institutional investors?
A: HBAR powers the Hedera network, which is widely used for enterprise applications including tokenized assets and CBDCs. Supporting HBAR allows institutions to manage a broader range of digital assets within a compliant, secure environment.

Q: How does DeRec improve upon traditional seed phrase recovery?
A: DeRec eliminates the need to store or remember seed phrases by distributing encrypted recovery data across decentralized nodes. This prevents loss due to human error and protects against social engineering attacks.

Q: Is Ripple Custody available to retail investors?
A: Currently, Ripple Custody is designed specifically for regulated institutions such as banks, wealth managers, and hedge funds. Retail access is not supported at this time.

Q: Does Ripple Custody support other blockchains besides Hedera and XRPL?
A: Yes. The platform supports Ethereum-based tokens (ERC-20s), XRPL tokens, and now HBAR. Its modular design allows for future expansion to additional networks as demand grows.

Q: How does Ripple ensure regulatory compliance?
A: Through built-in tools like transaction whitelisting, withdrawal caps, role-based permissions, and audit trails. These features help institutions meet requirements under frameworks such as AML/KYC, MiFID II, and SEC guidelines.

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Conclusion

Ripple Custody’s integration of HBAR support via a shared MPC wallet represents a major step forward in secure, compliant cross-chain asset management. Validated by academic research and designed with institutional needs in mind, the solution offers enhanced security through decentralized recovery, granular compliance controls, and seamless multi-chain interoperability.

As digital asset adoption accelerates among traditional financial players, solutions like this will play a pivotal role in bridging legacy systems with modern blockchain infrastructure—offering both innovation and assurance in equal measure.