Ripple Prime, the brokerage formerly known as Hidden Road, now allows institutional clients to trade swaps tied to more than 100 stock, commodity and currency markets around the clock, using Ripple’s RLUSD stablecoin as collateral. The service, announced on Oct. 15, already counts trading firm Virtu as a user, Ripple said.
HSBC characterized the offering as “evolutionary, not revolutionary,” cautioning that limited liquidity could constrain large trades and initially favor market makers, proprietary traders and hedge funds over institutions seeking strategic hedges.
How the swaps work
The swaps track perpetual futures listed by Trade.xyz, a platform for stock and commodity contracts on Hyperliquid, a crypto derivatives exchange. Perpetuals have no expiry date and trade continuously, letting a fund take a position on gold on Sunday while conventional markets are closed. Clients deal with Ripple Prime, which manages their collateral and risk across positions, and can use RLUSD to back their trades. Ripple had already connected its brokerage to Hyperliquid in February.
Liquidity concerns
Daragh Maher, head of digital assets research at HSBC, wrote in a note to clients on Monday that the market is growing rapidly but remains small compared with traditional finance markets. “The stronger case for the product comes once there is sufficient depth for investors to express views and adjust risk when conventional markets are closed,” Maher wrote. He added that until that depth develops, activity is more likely to be concentrated among market makers, proprietary traders and hedge funds pursuing basis trades—strategies that try to profit from price gaps between related positions—than among institutions seeking strategic hedges.
HSBC said Ripple’s success would depend on whether the service is cheaper, simpler and makes better use of clients’ collateral than existing brokers and venues.
Weekend trading risks
The risks of weekend trading surfaced when nearly $52 million in leveraged chip-stock positions were forcibly closed within 10 minutes as selling spread from Binance to Hyperliquid. The underlying shares were not trading, leaving the contracts without fresh stock-market prices to follow.
The new swaps are offered through Ripple Prime’s British Virgin Islands license, with more jurisdictions planned. Ripple has named an early customer but hasn’t disclosed how much the service has traded. The company is already earning fees financing leveraged stock bets, a business long dominated by banks.
