Ripple Prime now offers institutional clients 24/7 perpetual swaps tied to more than 100 reference markets. HSBC warns that thin liquidity could keep large investors from using the service heavily, and the offering does not make XRP a required asset.
Ripple Prime started supporting perpetual swaps linked to more than 100 reference markets on October 15, covering equities, stock indexes, exchange traded funds, metals, energy products and foreign currencies. Trading firm Virtu was among the institutional clients already using the service, according to Ripple.
HSBC, however, warns that limited liquidity could keep large investors from making extensive use of it. In an October 20 note, HSBC digital assets research head Daragh Maher called the offering "evolutionary, not revolutionary".
Ripple Prime brings traditional market exposure to weekend trading
Institutions can trade swaps linked to perpetual futures listed by Trade.xyz on Hyperliquid, which lets them take positions in stocks, gold and oil while the underlying markets are closed. Unlike conventional contracts, perpetual futures have no fixed expiration date.
Ripple Prime acts as the counterparty to its clients and handles collateral management, financing and risk across supported positions. Clients can post Ripple's RLUSD stablecoin as collateral. The swaps are currently offered through Ripple Prime's British Virgin Islands licensed operation, and the company has not disclosed trading volumes for the product.
HSBC questions market depth
According to Maher, the market for perpetual contracts linked to traditional assets has been growing quickly but remains relatively small compared with the underlying financial markets. Institutions still need enough liquidity to enter or exit positions at acceptable prices.
The risk has already surfaced. Nearly $52 million in leveraged chip stock positions were reportedly liquidated within 10 minutes during a recent weekend, as selling pressure spread from Binance to Hyperliquid. HSBC expects early participation to come primarily from market makers, proprietary trading firms and hedge funds pursuing basis trades.
No direct demand for XRP
The offering does not establish a direct source of demand for XRP. Institutions can use RLUSD as collateral, the contracts trade through Hyperliquid, and XRP has not been identified as a required settlement or collateral asset. Ripple has not announced an XRP integration for these swaps.
Source: crypto.news
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