Ripple has made headlines with its $1.25 billion acquisition of Hidden Road, a global prime brokerage and credit network serving over 300 institutions. Ripple chief technology officer (CTO) David Schwartz described the potential deal as a “defining moment” for both XRP and the XRP Ledger (XRPL).
Ripple’s Hidden Road Acquisition
Ripple announced its plans to acquire Hidden Road on April 8, becoming the first crypto company to own and operate a global, multi-asset prime broker.
According to the San Francisco-based crypto solutions company, this move aligns with its long-held vision of transforming the XRPL into a scalable platform for institutional asset tokenization.
Reacting to the positive development, Schwartz noted that Hidden Road processes over $10 billion and 50 million daily transactions across traditional financial networks. With this acquisition, Ripple plans to introduce a portion of that volume to the XRPL, he added.
He further highlighted the potential to use the XRPL for payments and tokenized real-world assets (RWAs), such as commodities, securities, and money market funds.
Schwartz wrote: “Ripple’s acquisition of Hidden Road is a defining moment for the XRP Ledger and XRP. The prime broker clears upwards of $10B and processes over 50M transactions a day on various traditional rails, waiting up to 24 hours for those transactions to settle. Now imagine even a portion of that activity on the XRP Ledger – and that’s exactly what Hidden Road plans on doing – not to mention future use of collateral and real-world assets tokenized on the XRPL.”
Read also: XRP Breaks 5-Month Record in Monthly Returns, Outpacing Ethereum
Growing Real-World Asset Market
While Ripple has previously partnered with crypto exchanges like Archax to issue tokenized funds on the XRPL, actual adoption has been modest. Per RWA.xyz data, the ledger hosts only two RWA projects worth approximately $50 million as of April 19.
The two projects are ‘abrdn Liquidity Fund (Lux) – US Dollar Fund’ ($44.9 million) and ‘OpenEden TBILL Vault’ ($5.1 million), which are both U.S. Treasuries.
However, the broader RWA market is expanding. Data from RWA.xyz also shows a 9.2% increase in tokenized assets on-chain in the past 30 days, defying the general crypto market downturn.
Accordingly, several experts project that this sector could become a multi-trillion-dollar industry by 2030, covering markets like bonds, equities, real estate, and commodities.
Moreover, industry leaders, including Visa, CME Group and Google, have also begun exploring tokenization through blockchain. In April 2024, bitcoin exchange-traded fund (ETF) issuer BlackRock led Securitize’s $47 million funding round for RWA tokenization expansion.
Read also: Real-World Assets Tokenization Explained: How it Works & Everything In Between
Above all, regulatory support is strengthening, and as Ripple integrates Hidden Road’s institutional networks, the XRPL may soon emerge as a key player in this rapidly growing RWA market.
Interestingly, the blockchain network is already making strides in the decentralized finance (DeFi) space as it continues to hit new highs in automated market maker (AMM) liquidity.
