Crypto Firm Ripple To Buy Broker Hidden Road For $1.3 Billion. What It Means For XRP.

By Elsa OhlenRipple Labs, the company behind the cryptocurrency XRP, has agreed to buy prime-brokerage Hidden Road for $1.25 billion.It's one of the biggest deals in the digital asset space to date, the company said in a statement Tuesday morning."We are at an inflection point for the next phase of digital asset adoption — the U.S. market is effectively open for the first time due to the regulatory overhang of the former SEC coming to an end, and the market is maturing to address the needs of traditional finance," CEO Brad Garlinghouse said.Earlier this year, Ripple said the Securities and Exchange Commission had dropped its appeal case against the company, bringing an end to a four-year long legal battle. The regulator, under former leadership of Gary Gensler, charged Ripple with selling an unregistered security in 2020."With these tailwinds, we are continuing to pursue opportunities to massively transform the space, leveraging our unique position and strengths of XRP to accelerate our business," Garlinghouse added in a statement Tuesday.XRP price has been gaining throughout the early hours of Monday and before Ripple's announcement. It last traded at $1.96.Hidden Road will move its post-trade activity across the XRP ledger to streamline operations, Ripple said. The hope is that it will strengthen its role as the go-to blockchain for institutional decentralized finance.The acquisition is also meant to reinforce the use case for Ripple's stable coin RLUSD, a coin pegged to the U.S. dollar, for cross-margining between digital assets and traditional markets. Cross-margining is a trading risk strategy that reduces margin requirements by offsetting positions across multiple accounts.The deal is expected to close in the coming months, subject to regulatory approvals, Ripple said.Write to Elsa Ohlen at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.