Ripple Brings Traditional Finance to Always-On Stock Bets, but HSBC Sees Thin Liquidity

Ripple is opening the door to 24-hour trading in stocks, gold and oil for institutional clients through Ripple Prime, its brokerage business. However, HSBC has cautioned that limited liquidity could hinder growth, especially for investors looking to execute large transactions.

Daragh Maher, HSBC’s head of digital assets research, described the initiative as an incremental development rather than a revolutionary change in a Monday note to clients shared with CoinDesk.

Maher said the market is expanding rapidly but remains relatively small compared with the traditional financial markets it tracks. He noted that the platform’s usefulness will depend on whether liquidity improves enough for investors to establish positions and adjust their risk exposure when conventional exchanges are closed.

Ripple Prime, previously known as Hidden Road, enables clients to trade swaps linked to more than 100 markets, including stocks, commodities and foreign exchange. These contracts allow traders to profit from price changes without purchasing the underlying assets. Ripple announced on Oct. 15 that trading firm Virtu was already using the service.

The contracts track perpetual futures listed by Trade.xyz on Hyperliquid, a crypto derivatives exchange. Because these futures have no expiration date and can trade continuously, investors can take positions in assets such as gold over weekends when traditional markets are inactive.

Ripple Prime manages collateral and risk across clients’ positions, while its RLUSD stablecoin can be used to back trades. The company connected its brokerage platform to Hyperliquid in February.

Despite these features, finding enough buyers and sellers remains a key challenge for large institutional orders. Investors seeking to trade millions of dollars need sufficient market participation to avoid significant price changes when entering or exiting positions.

Recent volatility highlighted the risks. Nearly $52 million in leveraged chip-stock positions were liquidated within 10 minutes as selling spread from Binance to Hyperliquid. Since traditional stock markets were closed, the contracts lacked updated share prices, increasing uncertainty for traders.

HSBC expects initial activity to come mainly from market makers, proprietary trading firms and hedge funds pursuing basis trades. These strategies aim to profit from price differences between related financial instruments rather than primarily serving as long-term hedges.

Maher indicated that institutional participation is likely to broaden only when liquidity becomes deep enough to support larger trades and more effective risk management.

The bank also said Ripple’s competitiveness will depend on whether it can offer lower costs, simpler execution and better collateral efficiency than established brokers and trading venues.

Ripple has already begun generating fees by financing leveraged stock positions, entering a business traditionally dominated by banks, according to CoinDesk.

The new swaps are currently available under Ripple Prime’s British Virgin Islands license, with plans to expand into additional jurisdictions. Ripple has identified an early customer but has not disclosed the amount of trading activity the service has handled so far.