Ripple thinks its newly acquired prime brokerage, Hidden Road, will boost confidence in its tiny stablecoin, RLUSD. The $1.2 billion cash, equity, and XRP token deal is quadruple the value of RLUSD’s market capitalization.
Unlike the $1-pegged RLUSD, the value of XRP is supposed to rally in response to positive developments.
Unfortunately, XRP has declined in value today since CEO Brad Garlinghouse’s morning announcement of the company’s most expensive acquisition ever.
Price of XRP since Brad Garlinghouse’s 8:06am NYC time zone tweet.
Read more: PayPal and Ripple stablecoins still sub-1% despite ‘stablecoin gold rush’
According to Garlinghouse, Hidden Road will use Ripple’s RLUSD as collateral while prime brokering, “including cross-asset (crypto and traditional instrument) trades.”
Why Hidden Road couldn’t simply use another stablecoin to serve the same purpose wasn’t clear from the press release.
‘Efficient cross-margining’ despite many other marginable stablecoins
According to Ripple, RLUSD is somehow “the first stablecoin to enable efficient cross-margining between the digital asset space and traditional markets,” despite many years of stablecoin-based margin across digital and traditional assets.
Indeed, a variety of stablecoins are eminently marginable and have denominated leveraged contracts for a variety of traditional assets for years.
CoinMarketCap found less than $50 million worth of volume traded on RLUSD in the past 24 hours. CoinGecko found less than $7 million.
Both of those estimates compare to more than $80 billion for RLUSD’s biggest competitor, USDT, over the same period.
RLUSD’s market capitalization today is less than 0.04% of the stablecoin industry.
