Ripple is poised to acquire the global prime brokerage platform Hidden Road for $1.25 billion.
As announced on April 8, this acquisition positions Ripple as the first crypto-native company to possess and operate a multi-asset prime broker with a well-established institutional network.
The company highlighted that this deal will enhance its institutional service offerings and create a direct connection between traditional financial markets and blockchain-based ecosystems.
Brad Garlinghouse, the CEO of Ripple, expressed that this agreement stands as one of the largest transactions in the crypto industry. However, he emphasized that the significance lies not in the price, but in the opportunity this deal creates for the crypto space to engage with the most reputable and expansive traditional markets, and vice versa.
Hidden Road provides a variety of services to institutional clients, such as trade clearing, prime brokerage, and financing options that encompass foreign exchange, digital assets, derivatives, fixed income, and swaps.
Ripple regards this infrastructure as an essential move to boost the institutional adoption of blockchain-enhanced financial tools.
Integration Plans for Ripple and Hidden Road
As part of the arrangement, Ripple intends to incorporate its enterprise-grade stablecoin, RLUSD, into Hidden Road’s brokerage services.
RLUSD is set to act as collateral for cross-margining between cryptocurrency and traditional financial instruments, making it the first stablecoin to facilitate such functionality at scale.
Additionally, Hidden Road will utilize XRP and the XRP Ledger (XRPL) to optimize trade settlement processes. This integration is anticipated to reduce settlement times from hours to mere minutes, significantly lowering operational costs.
Garlinghouse remarked that Ripple is committed to demonstrating the ledger’s capability to support enterprise-grade decentralized finance solutions.
Moreover, through this acquisition, Ripple aims to fortify its cross-border payment services and provide sophisticated custody solutions to institutional clients, striving to deliver secure and cost-effective tools that effectively bridge the gap between digital and traditional finance on a larger scale.