Hidden Road, a leading digital asset and foreign exchange prime brokerage firm that was recently acquired by Ripple, has made significant strides in expanding its services by securing a broker-dealer license in the US. In an exclusive interview with Bloomberg News, Noel Kimmel, the President of Hidden Road, revealed that this license will allow the firm to cater to institutional investors by offering prime brokerage, clearing, and financing services across fixed-income assets.
This regulatory approval marks a pivotal moment for Hidden Road as it moves towards its goal of becoming a full-service, non-bank brokerage firm that caters to a diverse range of asset classes. With this license, Hidden Road can now extend its offerings beyond digital assets and foreign exchange into traditional markets, including fixed income. The firm recently became a member of the Fixed Income Clearing Corporation (FICC), further solidifying its presence in the fixed-income market.
The acquisition of Hidden Road by Ripple has greatly enhanced the firm’s profile, particularly in the wake of the 2022 FTX collapse, which heightened institutional demand for prime brokerage services with robust risk mitigation measures in the crypto sector. As Hidden Road continues to expand its services, institutional clients can expect access to fixed-income repurchase agreements, global funding services, and clearing capabilities across new asset classes in the near future.
Ripple’s acquisition of Hidden Road for $1.25 billion in April marked a significant milestone for both companies. Ripple CEO Brad Garlinghouse hailed the acquisition as a unique opportunity to bridge traditional financial markets with blockchain-powered ecosystems. By leveraging Hidden Road’s infrastructure, Ripple aims to accelerate institutional adoption of blockchain-based financial services, offering a comprehensive suite of services including trade clearing, financing, custody, and risk management.
As part of the integration, Ripple plans to utilize its RLUSD stablecoin as collateral for cross-asset trades within Hidden Road’s brokerage services. Additionally, Hidden Road will leverage the XRP Ledger to facilitate faster trade settlements, reducing settlement times from hours to minutes and lowering operational costs for institutional clients.
Overall, the acquisition of Hidden Road and the subsequent expansion of its services underscore Ripple’s commitment to providing enterprise-grade financial tools to institutional clients on a global scale. The integration of Hidden Road’s capabilities with Ripple’s innovative solutions sets the stage for a new era of financial services that seamlessly blend traditional and blockchain-based offerings.