Ripple, After acquiring Hidden Road, acquires US broker-dealer license... Full-scale entry into bond market
Prime brokerage firm Hidden Road, acquired by Ripple, has obtained a broker-dealer license from the Financial Industry Regulatory Authority (FINRA), formalizing its expansion into the traditional bond market. On the 17th (local time), Hidden Road announced its plan to strengthen its capabilities in clearing and financial services for institutional clients in the fixed income asset sector through this authorization.
Just ten days after being acquired by Ripple for $1.25 billion on the 8th, Hidden Road obtained the license. This authorization is regarded as an important milestone for Ripple, the cryptocurrency payment network, in broadening its interface with the traditional financial market. FINRA broker-dealer registration is a prerequisite for regulatory compliance to protect investors, enhancing trust among institutional investors. Texas-based investment bank Telos Capital Advisors analyzed that “such registration makes a substantial difference in industry credibility.”
Hidden Road, having already started based on the foreign exchange market, operates prime brokerage and credit networks encompassing cryptocurrency and traditional financial assets, currently clearing over $10 billion in trades daily for more than 300 institutional clients. Its expansion into the digital asset sector attracted the interest of blockchain company Ripple, leading to the acquisition.
Ripple's Chief Technology Officer (CTO) David Schwartz stated about the acquisition, “This is a decisive moment in expanding the potential of the XRP Ledger to traditional financial market payment infrastructure.” Ripple CEO Brad Garlinghouse also emphasized, “Hidden Road is now ready to grow into the largest non-bank prime broker.”
Ripple's moves coincide with recent changes in the U.S. regulatory environment. Following President Trump's reelection, as a cryptocurrency-friendly stance spreads, Ripple acquired remittance licenses in January this year from both Texas and New York, and in March gained the upper hand in a long legal dispute with the U.S. Securities and Exchange Commission (SEC). With the SEC officially dropping the lawsuit against Ripple, XRP has been recognized as a digital commodity, not a security.
Furthermore, Paul Atkins, the SEC commissioner-designate, who passed the U.S. Senate on the 9th, is about to take office, which is perceived as a signal of a policy shift favorable to cryptocurrency companies, including Ripple.
The licensing of Hidden Road and expansion of Ripple's financial infrastructure is another example showing that the boundaries between cryptocurrency and traditional finance are collapsing. Ripple is strengthening its access to existing financial systems while expanding the real-world use of digital assets, creating a new market paradigm.