Crypto Makes History
Crypto big gun Ripple has become synonymous with strategic buys.
Among the biggest of the XRP issuer’s acquisitions is Hidden Road, now known as Ripple Prime.
Why this purchase is considered relevant is because it has made Ripple the first-ever crypto native currency to own a global multi-asset prime broker.
Unsurprisingly, the move reflected positively in the XRP price when it was first confirmed.
More than 300 financial institutions benefit from Ripple Prime’s financing, clearing and brokering services.
What it allows the crypto to do is create seamless institutional trading across traditional and digital assets by blending conventional finance with crypto infrastructure.
By now it is no secret that digital-asset tools compliant with existing regulations are drawing huge interest from banks and related institutions.
Crypto Collateral is King
According to Reece Merrick, Ripple’s managing director of Middle East & Africa operations, Ripple Prime clears $3 trillion across all markets annually.
A key aim of the acquisition is to expand Ripple’s liquidity and collateral flexibility.
Looking at the bigger picture, Ripple USD, the crypto’s stablecoin, is being used as collateral by an increasing number of investors.
Ripple Prime is thus perfectly suited to helping Ripple capitalise on this interest.
Effectively, the platform is a digital-age version of a traditional prime broker who serves as an intermediary between financial markets and trading firms.
The difference now is that digital assets, forex and fixed income, among others, are all integrated into one platform.
Also Read: Best Cryptocurrencies to Invest in During This Bull Run
Moving Beyond Payments
From the outset, XRP Ripple’s native digital asset, has been viewed as a bridge currency for cross-border payments and managing liquidity.
The company’s CEO, Brad Garlinghouse, has repeatedly stressed that XRP lies at the centre of everything Ripple does.
Ripple Prime takes XRP beyond the payment space and into a brokerage system boasting a multitude of assets.
The ability of institutions to hold balances in Ripple USD, use it as collateral and make direct transaction settlements is considered a game-changer in crypto circles.
To be able to make use of state-of-the-art blockchain technology while still offering a stable fiat equivalent instrument is one of the most innovative developments of the past few years.
Also Read: Crypto Wallets: A Closer Look at the Top 5 Options
Ripple Swiftly Does it
It is virtually impossible to mention Ripple without comparing it to SWIFT.
The crypto is widely perceived as a pretender to the cross-border payments throne currently occupied by the global financial messaging and settlement service.
This is because it is far faster and cheaper than SWIFT.
It is no surprise then that the incumbent has been building blockchain solutions of its own and exploring interoperability between traditional finance and blockchain networks.
This adds another intriguing dimension to the battle for supremacy.
In the SWIFT model, blockchains remain an external system. But with Ripple Prime, the blockchain is the system.
This means that institutions can operate within a unified prime-broker platform.
Ultimately, Ripple Prime offers a fully operational alternative to legacy systems.
It will be fascinating to see how this rivalry unfolds in the coming years.
