Ripple’s Hidden Road has launched cryptocurrency swaps for institutional investors in the United States. The service allows US institutional clients to trade cash-settled over-the-counter (OTC) swaps across multiple major crypto assets for the first time.
OTC swaps are private, off-exchange transactions where two traders agree to exchange cryptocurrency assets directly. They often involve large trades designed to minimize disruptions to market prices on public exchanges. These sophisticated instruments have been standard in traditional finance but remained elusive for US crypto institutions due to regulatory and infrastructure limitations.
How the Hidden Road OTC Swaps Work
The timing proves strategic, as Hidden Road recently secured crucial regulatory approvals. These include a broker-dealer license from the Financial Industry Regulatory Authority (FINRA). Additionally, it became one of the first companies to receive a Markets in Crypto-Assets (MiCA) license in Europe when the framework entered full force on December 30, 2024.
The product is operated through Hidden Road Partners CIV UK Ltd., which is regulated by the United Kingdom’s Financial Conduct Authority (FCA). This structure provides institutional-grade oversight while enabling US clients to access previously unavailable trading capabilities.
Beyond simple execution, Hidden Road’s offering includes comprehensive cross-margining and financing services. This enables clients to optimize collateral management by offsetting positions across various asset classes. These additional services enhance operational efficiency for institutional traders seeking sophisticated exposure to digital assets without sacrificing liquidity or leverage efficiency.
Rising Institutional Demand
In January 2024, crypto OTC infrastructure firm Finery Markets reported that institutional OTC volumes jumped 106% year-over-year. This highlighted the growing appetite for these advanced trading tools.
This development represents a deliberate step toward mainstream institutional adoption of cryptocurrency. It offers familiar derivatives market tools adapted for digital assets within a regulated framework. As traditional and digital financial services continue converging, Hidden Road‘s measured approach may establish new standards for security, transparency, and accessibility in the prime brokerage space.
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