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Ripple today announced the acquisition of Hidden Road for $1.25 billion, one of the largest deals in the digital asset industry. Ripple's acquisition makes it the first cryptocurrency company to own and operate a global, multi-asset prime broker.
Ripple CEO Brad Garlinghouse reacted to the historic move with a tweet, calling it "one of the largest deals ever in the crypto space."
Notwithstanding the price tag, Garlinghouse added that the deal marks a once-in-a-lifetime opportunity for crypto to access the largest and most trusted traditional markets, and vice versa. Ripple has been a customer of Hidden Road for years, already clearing $3 trillion annually across markets with more than 300 top institutional customers.
Tomiwabold OlajideRipple also sees in the move the potential to optimize costs and liquidity in its cross-border payments solution, Ripple Payments, as well as provide critical custody services to Hidden Road's customers who require bank-level digital asset custody.
XRP and RLUSD to benefit from move
Ripple will inject billions of dollars of capital to provide immediate scale and meet the demand for Hidden Road’s prime brokerage, clearing and financing platform.
Alex DovbnyaLikewise, Hidden Road will migrate post-trade activity across XRP Ledger (XRPL), demonstrating its potential as the go-to blockchain for institutional decentralized finance (DeFi).
According to Ripple CEO Brad Garlinghouse, "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. Instead of waiting for <24 hours to settle trades through fiat rails, Hidden Road will be using XRPL for clearing a portion of trades and, most consequentially, using RLUSD as collateral across its prime brokerage services, including cross-asset (crypto and traditional instrument) trades."
Hidden Road will also leverage RLUSD 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.
Vladislav Sopov
Dan Burgin