Ripple Launches OTC Crypto Swaps for US Institutions
Ripple’s newly acquired prime broker, Hidden Road, has launched cash-settled over-the-counter (OTC) swaps for institutional investors in the United States. Announced on May 28 via a press release from Hidden Road, the service marks one of the first product launches since Ripple’s $1.25 billion acquisition of Hidden Road in April 2025.
Overview of the OTC Swap Product
The new OTC swap facility allows US institutional clients to trade derivatives on major digital assets—including Bitcoin (BTC), Ether (ETH) and XRP—without executing on centralized exchanges. Utilising a cash-settlement mechanism, counterparties agree on a notional amount and net the difference in USD via Fedwire or ACH at maturity. Hidden Road’s platform supports both bilateral netting and margin optimisation through ISDA SIMM-compliant algorithms, reducing capital requirements and counterparty credit exposure.
- Asset coverage: BTC, ETH, XRP, LTC
- Settlement: Cash-settled T+0/T+1 via USD rails
- Risk management: Real-time margin calls; collateral in USD, US Treasuries and USDC
- Connectivity: FIX API, REST endpoints, dual-factor authentication
Regulatory and Licensing Framework
Hidden Road Partners, the UK-regulated arm under the Financial Conduct Authority (FCA), offers the swap product in the US under FINRA broker-dealer registration. This dual-jurisdiction license structure ensures compliance with SEC and CFTC regulations on securities and derivatives trading. The firm also holds a Markets in Crypto-Assets (MiCA) license from the Dutch Authority for the Financial Markets, reinforcing its cross-border authorization footprint.
Market Impact and Institutional Demand
According to Michael Higgins, Hidden Road’s global CEO, OTC crypto swaps represent more than 40% of global digital asset turnover, although US institutions have been largely excluded until now. Industry data from Finery Markets indicated a 106% year-on-year increase in institutional OTC volumes during 2024, driven by demand for large-block trading that minimises exchange slippage.
“US digital asset institutions have been underserved from a product standpoint. Our OTC swaps deliver the liquidity, risk controls and operational integrations they require,” said Higgins.
Technical Architecture and Risk Management
Hidden Road’s infrastructure utilises segregated safeguarding accounts and cold storage for custodial assets, while leveraging real-time data feeds from major exchanges to mark-to-market positions. Margin requirements are dynamically calculated using a Value-at-Risk (VaR) framework across a rolling 10-day lookback. Smart matching algorithms optimise counterparty pairings, reducing net exposure and capital lock-up.
Future Outlook and Product Roadmap
Looking ahead, Hidden Road plans to introduce OTC options, structured note issuance and tokenised fixed-income products through the Ripple Liquidity Hub. The expanded suite aims to bridge traditional finance workflows with digital asset markets, targeting hedge funds, asset managers and insurance companies seeking diversified yield strategies.
Risks and Challenges
- Regulatory uncertainty in the US (SEC enforcement actions)
- Counterparty credit risk under extreme market stress
- Operational challenges during periods of high volatility
Expert Perspectives
Industry analyst Sara Lee of Digital Asset Research commented, “By integrating prime brokerage services with OTC derivatives, Ripple’s Hidden Road could reshape institutional access to crypto liquidity and risk management.”