US cryptocurrency group Ripple is acquiring UK-headquartered prime broker Hidden Road for US$1.25 billion, representing one of the largest deals in the digital asset space and making it the first crypto company to own and operate a global, multi-asset prime broker.

Hidden Road, it points out, offers institutions a one-stop-shop of advanced services, including clearing, prime brokerage and financing across foreign exchange, digital assets, derivatives, swaps and fixed income.

For the crypto industry to achieve the next phase of growth, it’s critical, Ripple argues, that core infrastructure is in place for institutional adoption. Thus, prime brokers bring the necessary credibility and professional trading services expected in legacy finance to digital assets.

Together, both companies, they say, are bringing the promise of digital assets to institutional customers at scale, bridging traditional and decentralized finance.

The prime broker has a strong business, clearing US$3 trillion annually across markets with more than 300 top institutional customers. With the backing of Ripple’s significant balance sheet, Hidden Road will exponentially expand its capacity to service its pipeline and become the largest non-bank prime broker globally.

This acquisition also reinforces Ripple USD’s ( RLUSD ) position, the crypto company notes, as an enterprise-grade USD-backed stablecoin with real utility as Hidden Road leverages it as collateral across its prime brokerage products. This will make RLUSD the first stablecoin to enable efficient cross-margining between the digital asset space and traditional markets.

Hidden Road will, in turn, migrate its post-trade activity across XRP Ledger ( XRPL ) to streamline operations and lower costs, demonstrating XRPL’s potential as the go-to blockchain for institutional decentralized finance.

The crypto company also sees the potential to optimize costs and liquidity in its cross-border payments solution, Ripple Payments, and provide critical custody services to Hidden Road’s customers who need bank-grade digital asset custody.

Ripple participated in Hidden Road’s Series B and is a customer of its platform. The deal is expected to close in the coming months, subject to regulatory approvals.

“We are at an inflection point for the next phase of digital asset adoption – the US market is effectively open for the first time due to the regulatory overhang of the former SEC [US Securities and Exchange Commission] coming to an end, and the market is maturing to address the needs of traditional finance,” says Brad Garlinghouse, the crypto company’s CEO. “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 and enhance our current solutions and technology.”

Marc Asch, the prime broker’s founder and CEO, adds: “With new resources, licences and added risk capital, this deal will unlock significant growth in our business, allowing us to increase capacity to our customer base, expand into new products and service more markets and asset classes.”