Digital asset infrastructure provider Ripple has acquired multi-asset prime broker Hidden Road for US$1.25 billion. With the move, Hidden Road can now leverage Ripple’s stablecoin (RLUSD) as collateral across its prime brokerage products, making RLUSD the first stablecoin to enable cross margining between the digital asset space and traditional markets.
Ripple claims in a press release that the acquisition was “one of the largest deals in the digital assets space”, making it “the first crypto company to own and operate a global, multi-asset prime broker”. The value of teaming up with a prime broker is to “bring the necessary credibility and professional trading services expected in legacy finance to digital assets”. The partnership aims to bring digital assets to institutional customers at scale, bridging traditional finance and decentralised finance (DeFi).
Hidden Road will migrate its post-trade activity across the XRP public blockchain (XRPL) to streamline operations and lower costs. For Ripple, there is an opportunity to optimise costs and liquidity in Ripple Payments, its cross-border payments solution. Ripple will also be providing bank-grade digital asset custody to Hidden Road’s customers.
The acquisition takes advantage of a time of change for the US administration. Says Ripple CEO Brad Garlinghouse, “We are at an inflection point for the next phase of digital asset adoption – the US market is effectively open for the first time due to the regulatory overhang of the former SEC (Securities and Exchange Commission) coming to an end, and the market is maturing to address the needs of traditional finance.”
