Ripple, the leading provider of digital asset infrastructure for financial institutions, has announced it is acquiring Hidden Road for $1.25 billion. This represents one of the largest deals in the digital assets space. Additionally, with the acquisition, Ripple becomes the first crypto company to own and operate a global, multi-asset prime broker. Hidden Road is one of the fastest-growing prime brokers around the world. It offers institutions a one-stop-shop of advanced services. These include clearing, prime brokerage, and financing across foreign exchange (FX), digital assets, derivatives, swaps, and fixed income.
Ripple driving crypto industry growth
For the crypto industry to achieve the next phase of growth, it’s critical that core infrastructure is in place for institutional adoption. Prime brokers bring the necessary credibility and professional trading services expected in legacy finance to digital assets. Together, Ripple and Hidden Road are bringing the promise of digital assets to institutional customers at scale. They are bridging traditional finance and decentralised finance (DeFi).
Hidden Road has a strong business, clearing $3T annually across markets with more than 300 top institutional customers. Moreover, with the backing of Ripple’s significant balance sheet, Hidden Road will exponentially expand its capacity to service its pipeline. It will become the largest non-bank prime broker globally.
“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 coming to an end. And the market is maturing to address the needs of traditional finance,” said Brad Garlinghouse, CEO of Ripple. “With these tailwinds, we are continuing to pursue opportunities to massively transform the space. We are leveraging our unique position and strengths of XRP to accelerate our business and enhance our current solutions and technology.”
This acquisition also reinforces Ripple USD’s (RLUSD) position as an enterprise-grade USD-backed stablecoin with real utility. Hidden Road leverages it as collateral across its prime brokerage products. This will make RLUSD the first stablecoin to enable efficient cross-margining between the digital asset space and traditional markets.
Decentralised Finance (DeFi)
Hidden Road will, in turn, migrate its post-trade activity across XRPL. This will streamline operations and lower costs, demonstrating XRPL’s potential as the go-to blockchain for institutional decentralised finance (DeFi). Ripple also sees the potential to optimise costs and liquidity in its cross-border payments solution, Ripple Payments. And Ripple will provide critical custody services to Hidden Road’s customers who need bank-grade digital asset custody.
“With new resources, licenses, and added risk capital, this deal will unlock significant growth in Hidden Road’s business. Allowing us to increase capacity to our customer base, expand into new products, and service more markets and asset classes,” said Marc Asch, Founder and CEO of Hidden Road. ”Together with Ripple, we’re bringing the same level of trust and reliability that institutional clients are accustomed to in traditional markets. We are designed and optimised for a digital world.”
Digital Asset development
Thanks to its simple, secure, compliant digital asset infrastructure, Ripple is well-positioned to provide the core services that financial institutions need to tokenise, store, exchange and move digital assets. Furthermore, Ripple has over a decade of experience in the digital asset space and holds 60+ regulatory licenses and registrations in various jurisdictions.
Ripple participated in Hidden Road’s Series B and is a customer of its platform, experiencing firsthand the strength of the team, technology, risk management, and operational controls. The deal is expected to close in the coming months, subject to regulatory approvals.
- Digital Payments