Ripple has made a slew of acquisitions to regulate key transaction rails and route them by XRP and its stablecoin, Ripple USD (RLUSD), drawing comparisons to Japanese funding agency SoftBank.
The $1.25-billion acquisition of Hidden Road on April 8 permits Ripple to use RLUSD as collateral within the agency’s prime brokerage merchandise. Hidden Road may even migrate its post-trade operations to the XRP Ledger, the blockchain that underpins cryptocurrency XRP (XRP) and several other of Ripple’s institutional providers.
Omni Community co-founder Austin King is aware of Ripple’s technique firsthand. He bought his startup, Strata Labs, to Ripple in 2019 and describes the method as a “SoftBank-type” acquisition technique.
As a substitute of in-house improvement like Google or Meta (previously Fb), SoftBank constructed its empire by aggressive investments, joint ventures and acquisitions. Ripple appears to be following a related playbook, however not everybody’s satisfied the comparability holds.
The SoftBank mannequin in Ripple
Two offers put SoftBank on the worldwide map: an early investor in Yahoo and the legendary $20-million wager on Alibaba, which exploded to $60 billion when Alibaba went public in 2014. SoftBank recycled its returns into contemporary capital, exits and a sprawling ecosystem. That included the $20-billion transfer into US telecom by way of Dash and semiconductors by its $31-billion acquisition of UK-based ARM.
“This extensive breadth of protection allowed SoftBank to create synergies throughout their complete portfolio of firms,” King informed Cointelegraph. “Ripple is performing a related technique centered on monetary providers, however as a substitute of enterprise bets on Yahoo and Alibaba enabling this, it’s XRP.”
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Contemplating Ripple’s latest acquisitions, each corporations purchase infrastructure as a substitute of constructing it from scratch and deal with their portfolios as ecosystems slightly than one-off investments.
Each firms depend on capital as leverage. SoftBank used its $100-billion Imaginative and prescient Fund to outbid rivals. Ripple additionally has a warfare chest of XRP and money. As of March 31, Ripple had 4.56 billion XRP (round $11 billion at present costs) and one other 37.13 billion XRP ($89.8 billion) in escrow.
Acquisitions increase the footprint for XRP and RLUSD in conventional finance, turning them into embedded elements of custody, brokerage and fee flows. This creates what King describes as a token-fueled flywheel. Ripple makes use of its property to amass infrastructure, which in flip drives utilization again into these property.
“With a full-stack infrastructure, Ripple can embed XRP because the native bridge asset between networks, custodians and tokenized property. In the meantime, RLUSD can present a regulated, USD-pegged unit of account that establishments need,” mentioned Sid Powell, co-founder and CEO of institutional blockchain lender Maple.
King’s analogy has its skeptics.
“SoftBank operates extra as a conglomerate or holding firm, taking broader funding positions throughout industries. Alternatively, Ripple is taking a extra centered and product-related method with its latest acquisitions tied to fee missions and core blockchain,” Powell mentioned.
Casper Johansen, co-founder of Spartan Group, informed Cointelegraph the comparability appears “a bit stretched,” noting that SoftBank’s success got here from buying and turning round working companies, joint ventures, minority stakes and ultimately exiting some for giant good points.
Ripple joins the crypto M&A arms race
As a substitute of spanning telecom, media and chips, Ripple is assembling a monetary infrastructure stack. It acquired custody corporations Metaco in 2023 and Standard Custody in 2024. The most recent addition, prime dealer Hidden Road, brings 300 institutional shoppers clearing $3 trillion yearly.
“The place Metaco lays the muse — the vault for storing property — Hidden Road permits Ripple to leverage its huge stability sheet to turbocharge Hidden Road’s enterprise, during which entry to capital — a lot of capital — is vital with a purpose to continue to grow and competing,” Johansen mentioned.
The transfer echoes a broader M&A wave amongst US crypto corporations. Kraken lately acquired NinjaTrader for $1.5 billion, whereas Coinbase has acquired Deribit for $2.9 billion.
These acquisitions observe a shift within the US regulatory local weather that’s clearing the runway for crypto corporations to scale. For years, firms like Ripple have been caught in limbo, dealing with lawsuits, enforcement actions and denied entry to primary banking providers beneath Gary Gensler’s Securities and Change Fee.
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Whereas “debanking” remains a concern, business leaders say momentum is altering. Ripple CEO Brad Garlinghouse mentioned in a latest media interview that the SEC is anticipated to take a “very constructive and optimistic” stance towards the business.
Ripple itself spent years in a authorized battle with the SEC, which sued the corporate in December 2020. On Could 8, Ripple and the SEC reached a settlement to formally finish the case, pending courtroom approval.
Ripple’s subsequent strikes embrace stablecoins
Garlinghouse mentioned Ripple intends to proceed exploring acquisitions.
“I wouldn’t be stunned if within the subsequent 12 months or two we noticed the acquisition of a large-scale point-of-sale firm to increase their territory from backend monetary providers to extra direct client funds,” King mentioned.
On April 30, Bloomberg reported that Ripple made a $4 billion-to-$5 billion bid to acquire Circle, which was rejected for being too low.
Ripple’s latest strikes present it’s prepared to pursue high-stakes acquisitions, together with performs to soak up stablecoin rivals.
“The sensible integration of XRP stays restricted since establishments nonetheless hesitate to make use of unstable crypto property for core settlement,” mentioned Hadley Stern, chief industrial officer at Marinade. “RLUSD is extra promising, nevertheless it nonetheless faces main competitors from incumbents like USDC and PayPal USD.”
Stablecoin regulation within the US stays unresolved. The Guiding and Establishing Nationwide Innovation for US Stablecoins of 2025 Act — referred to as the GENIUS Act — did not go cloture within the Senate on Could 8.
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