- Ripple acquires prime broker Hidden Road for $1.25B, aiming to bridge traditional and decentralized finance with institutional clients.
- RLUSD will become the first stablecoin for cross-margining between crypto and traditional markets on Hidden Road.
- Hidden Road will migrate post-trade to XRPL, and Ripple sees cost/liquidity benefits for its payment solutions.
Ripple announced the acquisition of prime broker Hidden Road for $1.25 billion, in what marks the largest deal in the crypto space. The deal is touted to bring institutional customers at scale, bridging traditional finance and decentralized finance.
According to the press release, the deal also positions RLUSD as an enterprise-grade collateral across Hidden Road’s prime brokerage products. With this, it is poised to become the first stablecoin to enable efficient cross-margining between the digital asset space and traditional markets.
For Hidden Road, the next course of action involves migrating its post-trade activity to the XRPL to streamline operations and lower costs. Ripple also sees the potential to optimize costs and liquidity in its cross-border payments solution, Ripple Payments, and provide critical custody services to Hidden Road’s customers who need bank-grade digital asset custody.
The multi-asset broker offers a wide range of advanced services, including clearing, financing across foreign exchange (FX), digital assets, derivatives, swaps, and fixed income. Commenting on the acquisition, Brad Garlinghouse stated it is a “once-in-a-lifetime opportunity for crypto to access the largest and most trusted traditional markets, and vice versa.”
The Timing and Implications of Ripple’s Hidden Road Acquisition
Ripple has been a customer of Hidden Road for years, and we know their breadth of expertise firsthand, clearing $3 TRILLION annually for 300+ of the top financial institutions globally. This is the capital and activity that will tap into XRP and the XRP Ledger’s bread-and-butter – instant, efficient, scalable and low cost movement of value.
Furthermore, Ripple participated in Hidden Road’s Series B financial round, and the deal is expected to close in the coming months, subject to regulatory approvals.
Following the development, a few hawk-eyed market observers ponder over the timing of the announcement. Some crypto enthusiasts opined that the firm could have won the bid to acquire Hidden Road as early as in 2022/23 but couldn’t publicize it until its legal issues with the SEC were resolved. This was to protect Hidden Road’s business interests and reputation, providing an interesting insight into the significant deal.