Ripple has completed the purchase of global prime broker Hidden Road and rebranded the business as Ripple Prime, a bundled trading, financing and clearing desk for institutions, the company announced Friday.
Ripple said trading at the newly branded entity has tripled since the initial announcement and Ripple Prime now serves more than 300 institutional clients and has seen more than $3 trillion moved across all markets.
The company positions Ripple Prime as an all-in-one service spanning digital assets, forex, exchange-traded derivatives, over-the-counter swaps, fixed income clearing and repos, as well as precious metals, and cites SOC 2 Type II compliance, real-time risk management and cross-margining.
What does Prime Brokerage mean in simple English: For funds and market makers, a prime broker is a one-stop intermediary. Instead of having to coordinate with multiple exchanges, lenders, and custodians, a client uses a single desk that provides access to the market, extends financing so that trades do not have to be fully pre-funded, handles post-trade clearing and settlement, and aggregates collateral and risk on various positions.
In traditional finance, that consolidation can reduce friction and improve balance-sheet efficiency. Ripple says Ripple Prime brings a similar model to FX and derivatives as well as digital assets.
Today’s update follows Ripple’s April 8 announcement that it intends to acquire Hidden Road for $1.25 billion. At the time, Ripple structured the deal to become the first crypto company to own and operate a global, multi-asset prime broker.
“We are at an inflection point for the next phase of digital asset adoption,” Ripple CEO Brad Garlinghouse said in an April 8 press release. According to the same release, Hidden Road founder Mark Ash said the combination would “unlock significant growth” by adding licenses and risk capital.
Ripple also says the prime-brokerage unit will deepen the role of its US dollar stablecoin RLUSD. The fintech firm says some derivatives clients already hold balances in RLUSD and use it as collateral for prime-brokerage products.
Ripple previously named BNY Mellon as the primary reserve custodian of RLUSD and pointed to an “A” rating from researcher Bluechip due in July 2024 for stability, governance and asset backing.
The launch of Ripple Prime expands Ripple’s institutional incentives beyond payments and custody to the broader set of broker-dealer-like services that large trading firms have come to expect.
The large-scale transfer of assets and collateral will depend on customer demand, market conditions, and how Ripple Prime performs against existing leading brokers in both crypto and FX. For now, Ripple’s appeal to institutions is a single location for access, funding and risk control, with the possibility of using company-issued stablecoins as collateral.