Ripple buys cryptocurrency prime broker Hidden Road for US$1.25 billion

• Blockchain-based cross-border payments technology company Ripple has bought prime broker Hidden Road for US$1.25 billion

• The Ripple Stablecoin RLUSD will facilitate cross-margining between digital assets and traditional markets for Hidden Road customers

• Hidden Road will migrate its post-trade activity to the XRP Ledger (XRPL), the Ripple blockchain

Ripple, the technology company that uses blockchain to speed up and lower the cost of cross-border payments, has acquired non-bank prime broker Hidden Road for US$1.25 billion.

Hidden Road offers traders in cryptocurrencies, digital assets and traditional assets clearing, prime brokerage and financing services. In traditional markets, they span foreign exchange (FX), digital assets, derivatives, swaps, and fixed income.

Hidden Road says it clears US$3 trillion of transactions a year on behalf of more than 300 institutional customers. With the additional capacity of the Ripple balance sheet, the firm believes it can do more.

“We are at an inflection point for the next phase of digital asset adoption,” says Brad Garlinghouse, CEO of Ripple. “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. With these tailwinds, we are continuing to pursue opportunities to massively transform the space, leveraging our position and the strengths of XRP to accelerate our business and enhance our current solutions and technology.”

Hidden Road clients will gain access to the RLUSD Stablecoin for use as collateral in prime brokerage financing, including to cross-margin trades between digital asset space and traditional asset markets.

Post-trade activity at Hidden Road will in future settle across the XRPL blockchain ledger, which should make operations more efficient and lower costs.

Ripple will also furnish Hidden Road customers with cheaper and faster cross-border payments and custody services.

“With new resources, licences, 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,” explains Marc Asch, Founder and CEO of Hidden Road. “Together with Ripple, we are bringing the same level of trust and reliability that institutional clients are accustomed to in traditional markets — designed and optimised for a digital world.”

Ripple was already an investor in Hidden Road and a customer. The firm participated in Hidden Road’s Series B and has used its platform.

The deal is expected to close in the coming months, subject to regulatory approvals.