Bridging Chains & Custody: Ripple and Hedera Align in Shared-Custodial Wallet Innovation

The future of institutional digital asset management continues to evolve through layered innovation. A new academic paper published in the Future Internet journal introduces a wallet architecture that reshapes how institutions manage crypto assets across multiple chains. The document connects Ripple Custody and Hedera Hashgraph using a shared-custodial model enhanced by DeRec, a decentralized key recovery framework.

This research provides the first academic validation that Ripple Custody supports Hedera-based assets. It also outlines how multi-party computation and compliance features can streamline asset control across networks like Ethereum, XRPL, and Hedera. Importantly, the paper incorporates DeRec to mitigate recovery risks while maintaining self-custody principles. Together, these elements mark a new phase in how high-net-worth individuals and institutions can manage assets securely and compliantly.

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The Paper: What It Is and Why It Matters

The academic paper titled Shared-Custodial Wallet for Multi-Party Crypto-Asset Management was published on December 31, 2024. It appeared in Future Internet, a peer-reviewed journal hosted by MDPI that focuses on decentralized systems and digital asset infrastructure. This work introduces a shared-custodial wallet design built for institutional digital asset managers operating in regulated markets.

The paper outlines a wallet architecture that uses Multi-Party Computation (MPC) with a Threshold Signature Scheme (TSS). It distributes key shares across three entities: a client, a wealth manager, and a custody provider. These shares never combine into a full key, preventing single points of failure. The wallet includes built-in controls like transaction whitelists, withdrawal limits, and role-based authorizations. It is designed for secure and compliant asset management across Ethereum, the XRP Ledger, and Hedera Hashgraph.

What makes the paper especially important is its public confirmation that Ripple Custody supports Hedera assets. A comparison table inside the document lists Hedera among Ripple Custody’s supported networks. This is the first known academic reference to confirm that connection. The research also integrates the DeRec protocol, a decentralized recovery method that eliminates the need for seed phrases. DeRec uses helper nodes and conditional approvals to restore access securely. Ripple and Hedera both support DeRec as founding members of the DeRec Alliance.

The paper’s institutional context adds further weight. It was authored by researchers from the University College London Centre for Blockchain Technologies (UCL CBT) and the Exponential Science Foundation (formerly DLT Science Foundation DLT SF). Both organizations have documented ties to Ripple and Hedera governance and technical efforts. These affiliations suggest that the research is grounded in real-world requirements and is likely to inform future infrastructure decisions.

Author Breakdown and Institutional Importance

Each contributor plays a distinct role in shaping the research, both technically and strategically. Their combined expertise spans cryptography, governance, economics, and enterprise blockchain adoption.

• Dr. Paolo Tasca
  • Affiliation: Founder of UCL CBT; Executive Director at Exponential Science Foundation
  • Position: Advisor to Ripple; Former Hedera Governing Council Member
  • Relevance: Tasca works on cross-chain standardization and blockchain policy. His involvement ensures the design meets regulatory expectations and industry needs. His advisory roles in both ecosystems position him as a connector between research and adoption.
• Yimika Erinle
  • Affiliation: DLT Science Foundation
  • Position: Researcher focused on secure custody and decentralized infrastructure
  • Relevance: Erinle works on cross-protocol custody standards and helps align academic output with institutional blockchain needs. His role at Exponential SF bridges Ripple and Hedera communities through protocol-neutral research.
• Yebo Feng
  • Affiliation: University College London, Centre for Blockchain Technologies
  • Position: Cryptography and MPC researcher
  • Relevance: Feng contributes the technical foundations for the wallet’s MPC-TSS design. His focus ensures that private key operations meet institutional security requirements.
• Jiahua Xu
  • Affiliation: University College London, Centre for Blockchain Technologies
  • Position: Lecturer and researcher in DeFi architecture and token economics
  • Relevance: Xu provides insight into multi-chain portfolio management, staking, and economic controls. His input shapes the wallet’s compliance mechanisms and operational incentives.
• Nikhil Vadgama
  • Affiliation: Deputy Director at UCL CBT
  • Position: Academic and blockchain governance advisor
  • Relevance: Vadgama previously represented UCL on the Hedera Governing Council. He connects the wallet design to Hedera’s technical ecosystem and ensures alignment with governance practices.

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Institutional Context

Two research institutions support this paper, both deeply involved in blockchain infrastructure and governance. Their involvement brings credibility to the research and links it to real implementation pathways.

• University College London, Centre for Blockchain Technologies (UCL CBT)
  UCL CBT is one of the largest academic centers for blockchain research in Europe. It focuses on developing cryptographic models, distributed protocols, and governance frameworks. UCL CBT has partnered with several blockchain networks, including Ripple and Hedera. The center’s advisory role in these ecosystems gives it insight into production-level blockchain design.
• Exponential Science Foundation (EXP SF)
  Exponential Science Foundation supports applied research in decentralized technologies, focusing on regulated industries. It receives institutional support from Hedera and Ripple ecosystem contributors. EXP SF helps translate academic work into enterprise-ready solutions. Its focus includes tokenization, custody infrastructure, and identity systems.

Together, these organizations provide both technical expertise and access to real-world deployment environments. The paper reflects that dual purpose. It introduces a model that academic teams can study and enterprise stakeholders can adopt. The authors write with knowledge of the operational constraints faced by custodians, asset managers, and regulated financial firms.

This shared-custody model does more than demonstrate theoretical improvements. It creates a roadmap for how institutions can manage digital assets securely across multiple chains. The inclusion of Ripple Custody, Hedera, and DeRec shows that key infrastructure players are moving toward interoperability and standards that support institutional capital at scale.

You can access the full document here: Future Internet Journal – MDPI

Wallet Design: Shared-Custody with MPC and Threshold Signatures

The proposed wallet design is built on Multi-Party Computation (MPC) combined with Threshold Signature Schemes (TSS). This technical foundation supports a shared-custody model using a 2-of-3 key shard structure. In this design, the private key is never fully reconstructed. Instead, shards remain distributed among three parties:

• The client
• The wealth manager
• The custody system

For example, a hedge fund managing tokenized securities across XRPL and Hedera could maintain compliance by ensuring no single entity holds the full private key. This structure meets security standards while enabling operational flexibility.

Unlike cold storage or hardware wallets, this setup allows approvals and signing to happen without a single point of failure. It’s more secure than hot wallets and more usable than traditional multisigs, especially for organizations managing large portfolios. Additionally, this setup can integrate staking, lending, and liquidity provisioning through smart contracts.

DeRec: Removing Seed Phrases Through Decentralized Recovery

DeRec stands for the Decentralized Recovery protocol. It allows users to recover access to their wallets without storing or memorizing a private key or seed phrase. This is achieved through a set of helper nodes that hold encrypted fragments of recovery information. The protocol ensures no single helper can recreate the private key, maintaining privacy and security.

DeRec is a key feature in this wallet design and reflects growing support across the blockchain space. The DeRec Alliance includes founding members like Ripple, XRPL Labs, Hedera, and Algorand. Its mission is to create secure recovery tools without compromising decentralization. The integration of DeRec in an MPC-TSS wallet reflects a broader shift in how institutional platforms think about custody and backup solutions.

For example, if a user forgets their credentials or loses access to their device, the recovery process involves interacting with these helper nodes. This process restores access using predefined conditions, without compromising the wallet’s integrity. It’s a safety net for institutions managing multi-million-dollar portfolios without resorting to centralized backups.

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Ripple Custody and Hedera Integration: What the Paper Confirms

The most notable takeaway from the paper is its direct confirmation that Ripple Custody supports Hedera assets. Until now, documentation of this support has been scarce. The authors include a table comparing custody features, which lists Hedera as a supported chain within Ripple Custody infrastructure.

This establishes Ripple’s role as a cross-chain custody solution provider and positions Hedera within its supported network stack. For context, Ripple’s recent acquisitions and custody platform expansion, including Metaco, have emphasized multi-chain strategies. Adding Hedera strengthens Ripple’s reach in both the enterprise and decentralized sectors.

For developers and institutions, this confirmation opens new pathways. For example, a digital bond issued on Hedera can now be managed by a Ripple Custody platform that also oversees other tokenized assets on Ethereum or XRPL. This is significant for building diversified, secure, and compliant portfolios.

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Regulatory Features for Institutional Operations

Institutional custody must meet stringent compliance requirements. The wallet design includes several features built for regulated environments:

• Transaction whitelists: Only approved addresses can receive funds.
• Withdrawal limits: Thresholds prevent large transfers without additional approvals.
• Role-based authorization: Different team members can hold separate permissions for viewing, approving, or signing.

These mechanisms align with expectations from financial regulators. For example, asset managers in the European Union or United States face strict operational guidelines. This architecture enables firms to deploy on-chain assets while maintaining internal controls and audit trails.

Additionally, the wallet design includes smart contract integrations for automated compliance checks, such as real-time transaction approvals or alert mechanisms for flagged activities.

Business Model and Use Cases

The wallet introduces a monetization framework that includes:

• Listing fees for adding new assets
• Asset Under Management (AUM) fees based on portfolio size
• Transaction fees from asset movements or smart contract operations
• Performance fees tied to yield generation or market performance

This model is designed to support asset managers, hedge funds, private banks, and wealth management platforms. These institutions can offer clients services such as staking, lending, liquidity provisioning, and custody—all without relying on centralized exchanges.

For example, a private bank in Switzerland could use this wallet to manage tokenized treasuries on Hedera and corporate debt on Ethereum. Meanwhile, it could enable yield farming or liquidity provision on DeFi platforms, all while maintaining compliance with Swiss banking standards.

Ripple, Hedera, and DeRec: A Strategic Alignment

This paper reflects growing alignment between Ripple, Hedera, and the DeRec Alliance. The shared-custodial wallet is not just a technical innovation. It demonstrates a convergence of institutional design principles across networks previously considered separate.

Ripple provides a gateway to TradFi institutions through its regulatory-focused infrastructure. Hedera offers deterministic finality, native tokenization tools, and strong throughput. DeRec provides recovery assurance without undermining decentralization.

These three layers—custody, smart contract settlement, and secure access recovery—form a complete institutional stack. This design is especially useful for sectors like tokenized securities, real estate, and stablecoin issuance.

Institutional Access to RWA Markets

The tokenization of real-world assets (RWA) is growing rapidly. According to Boston Consulting Group and others, up to $30 trillion in RWA assets could be tokenized by 2030. Institutions want custody systems that offer security, compliance, and flexibility across multiple chains.

This wallet architecture positions itself as a tool for onboarding those flows. By using Ripple Custody, institutions can manage assets across Ethereum, XRPL, and Hedera. By adding DeRec, they can offer their clients secure access and recovery without relying on centralized account credentials.

Examples of potential use cases include:

• Pension funds managing tokenized real estate
• Family offices holding corporate debt on-chain
• Banks issuing digital bonds with multi-signature controls

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From Research to Infrastructure

This paper is not just academic theory—it reflects an emerging standard. It brings together key actors from Ripple, Hedera, and the broader Web3 research ecosystem to propose solutions that meet real-world requirements. The shared-custodial wallet, with its integration of MPC, DeRec, and compliance tooling, offers a framework ready for production-grade deployment.

As institutions continue exploring tokenization, the demand for secure, flexible, and recoverable custody will only grow. The Ripple Hedera Custody DeRec stack provides a concrete, research-backed path forward. Developers, investors, and policy makers should take note.

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