- Ripple has just announced its acquisition of Hidden Road, a prime brokerage firm, for a staggering $1.25 billion.
- Hidden Road offers services like clearing, financing, and prime brokerage across the foreign exchange, derivatives, fixed income, and crypto markets.
- The combination of Hidden Road’s institutional reach and Ripple’s infrastructure could help the XRPL to become a go-to venue for asset tokenization in the future
Ripple has just announced its acquisition of a prime brokerage firm called Hidden Road for a staggering $1.25 billion. This most recent deal is not only the largest acquisition in Ripple’s history, but it is also one of the biggest of its kind in the digital asset space.
The said buy is even larger than Stripe’s $1.1 billion purchase of Bridge earlier this year. So why is Ripple splurging this much money on a firm? Is this another effort to blur the lines between crypto and traditional finance? Let’s find out.
Why Hidden Road?
The company in question was founded in 2018. Since then, Hidden Road has established itself as a powerful name in institutional finance. Hidden Road offers a range of services like clearing, financing, and prime brokerage across several markets, including foreign exchange, derivatives, fixed income, and (of course) digital assets like crypto.
The company has more than $3 trillion cleared annually, along with over 300 institutional clients, including hedge funds and many others. This platform brings massive volume and credibility to the world of finance.
On a regular day, the firm processes over 50 million transactions and clears more than $10 billion. This scale positions the company as one of the biggest pieces of infrastructure that Ripple can now tap into.
According to a statement from Ripple CEO Brad Garlinghouse to CNBC, the acquisition was “born out of necessity”. Hidden Road, however efficient, faced limitations due to its balance sheet and was actively seeking external capital. Ripple has so far stepped in with not just the capital but a vision to combine the strengths of both firms.
Ripple’s RLUSD Stablecoin Takes Center Stage
A major part of this acquisition’s strategy involves the firm’s RLUSD stablecoin, which was launched in December of last year. Garlinghouse revealed that once the deal closes 9no later than Q3 of 2025), Hidden Road will begin using RLUSD as collateral across its brokerage products. This is important, especially in the prime brokerage ecosystem, where collateral is important.
RLUSD is expected to take center stage in use cases like loans and complex trades like short selling.
The RLUSD integration into this system could drive major real-world utility and demand for the stablecoin. “Collateral is key in this business,” Garlinghouse said. “Using RLUSD can help us offer more scalable products.”
Unlocking XRPL’s Tokenization Potential
More than expanding Ripple’s reach in the trad-fi space, the Hidden Road purchase could become a turning point for the XRP Ledger. According to an X post from Ripple CTO David Schwartz, this purchase is a “defining moment” for the XRPL.
Schwartz pointed out how even a fraction of Hidden Road’s transaction volume coming into the XRPL could massively boost its utility. “Now imagine even a portion of that activity on the XRP Ledger—and that’s exactly what Hidden Road plans on doing,” Schwartz said. He also hinted at future use cases where the XRP Ledger will be used for tokenized real-world assets (RWAs), with the RLUSD stablecoin acting as collateral on-chain.
This is great news for XRP and its investors, considering how analysts predict that the value of tokenized assets could break above $2 trillion by 2030. Ripple has also dipped its toes into the space in the past, with its collaboration with Archax to launch a tokenized money market fund on XRPL.
However, XRPL’s involvement in tokenized RWAs has so far been limited, with its current tracked assets sitting at just around $50 million. This acquisition could be the jumpstart that the XRPL needs to play an even larger role. The combination of Hidden Road’s institutional reach and Ripple’s infrastructure could help the XRPL to become a go-to venue for asset tokenization.
