Cryptocurrency company Ripple has released a new roadmap for digital asset trading for banks and institutional investors.
The whitepaper, titled “Plan for Corporate Digital Asset Trading,” presents a comprehensive framework aimed at enabling banks, hedge funds, and large financial institutions to access cryptocurrency markets in a safer, more efficient, and scalable way.
Ripple’s report states that the current market structure creates significant operational burdens and counterparty risks for institutional investors. Currently, large institutions are forced to open separate accounts on different exchanges, transfer funds between platforms, manage different credit limits, and assume separate counterparty risks for each transaction. It points out that problems or bankruptcies on a single platform (such as the major exchange crashes of the past) could lead to the freezing of funds.
Ripple’s proposed solution is a new model called “Digital Prime Broker” (DPB). In this structure, a single main prime broker will consolidate liquidity, act as a credit intermediary, and settle positions at the end of the day. The goal is to reduce capital requirements, lower counterparty risk, and increase operational efficiency.
Ripple is also proposing the use of $XRP Ledger (XRPL) in the infrastructure of its proposed DPB model. Through on-chain credit limits and faster settlement mechanisms, the goal is early netting, greater transparency, and reduced systemic risk. It is argued that this approach could create a structure similar to the mature prime brokerage structure found in traditional foreign exchange (FX) markets.
*This is not investment advice.
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