Custody Shifts Signal Institutional Readiness for Crypto Ecosystems

Crypto.com has entered into a strategic custody agreement with the Axelar Foundation to secure the storage and management of AXL tokens, the native asset of the Axelar blockchain network used for validator rewards, grants, and other network operations. This partnership, announced on Sept. 5, 2025, reflects a growing trend among blockchain projects to leverage institutional-grade custodial services to enhance credibility and operational efficiency. The decision aligns with the broader push for institutional adoption, as regulated custodians offer auditable processes, insurance, and infrastructure for activities like staking and liquidity management. The Axelar Foundation’s move to use Crypto.com Custody is seen as a step toward positioning the cross-chain network as enterprise-ready, facilitating tokenization efforts and reducing custody risk for businesses interacting with its infrastructure.

The agreement with Axelar is part of a series of recent custodial partnerships by Crypto.com. On Sept. 3, 2025, the firm also announced a similar arrangement with Frax, a stablecoin protocol, to manage and provide liquidity for FRAX and related assets on the Fraxtal chain. These collaborations are not merely administrative but are positioned as infrastructure milestones that could drive broader institutional adoption of digital assets. The rationale behind these moves is clear: institutional investors demand transparency and compliance, and placing tokens in a secure, regulated custody environment makes them more attractive to banks, asset managers, and large funds.

Crypto.com has publicly framed these agreements as part of its broader strategy to expand secure and institutional access to digital assets. The company emphasized that trusted custody is a critical enabler of deeper institutional engagement, allowing projects to offload complex compliance and operational burdens. For Axelar, the custodial partnership supports the network’s cross-chain ambitions, ensuring institutional-ready infrastructure for tokenization. For Frax, which operates stablecoin rails and a blockchain compatible with Ethereum, the arrangement reduces friction for institutional clients and fintechs seeking exposure to its tokens.

Industry observers note that such custody integrations could lead to more predictable staking behavior, improved liquidity, and larger institutional treasury allocations, all of which are crucial for the long-term sustainability of crypto ecosystems. However, it remains to be seen whether this trend will be widely adopted across the industry or remain a niche move among matured protocols. If more projects follow suit, the shift could signal a broader normalization of crypto as an asset class and reinforce confidence in its infrastructure.