Key Takeaways
- Stablecoins convert to cash in near real time for collateral accounts.
- DriveWealth is integrating dollar-backed token settlement in Europe, with U.S. expansion planned.
- Funding aims to match trading available 24 hours a day, five days a week.
Ripple Targets the Gap Between Trading Hours and Bank Transfers
Financial platforms offering U.S. market access could move funding faster under a partnership targeting the gap between trading hours and bank transfers. DriveWealth, a company supplying brokerage infrastructure to fintechs, digital wallets, and financial institutions, announced its collaboration with Ripple on Oct. 14. Its network powers investing services for more than 100 partners globally.
DriveWealth CEO Naureen Hassan said:
“We’ve already enabled 24/5 trading; now we need the funding to match, so clients can move with the markets instead of waiting for them.”
A separate mismatch arises as most U.S. securities trades require settlement, the exchange of cash and securities, one business day after trading. The T+1 settlement cycle took effect May 28, 2024. Dollar transfers across borders can take longer, a gap the announcement links to trapped capital and higher funding requirements.
RLUSD Links Brokerage Funding With Digital Dollars
DriveWealth is integrating Ripple’s stablecoin infrastructure for European settlement, using Ripple USD (RLUSD) on the XRP Ledger alongside minting and burning capabilities. Minting creates tokens, while burning removes them from circulation. Stablecoins aim to track a reference asset such as the U.S. dollar, allowing financial applications to transfer digital value without relying on a freely fluctuating cryptocurrency price.
The workflow converts these tokens into cash in near real time to support brokerage collateral accounts, where assets secure financial obligations. Ripple describes RLUSD as backed one-to-one by dollar reserves including cash and U.S. Treasuries. DriveWealth plans to extend stablecoin settlement to the U.S. and is adopting Ripple Payments, a cross-border payment service, to accept funds from its global partners.
Issuance and redemption tools connect these digital dollars with the operational systems that financial businesses already use. Ripple Mint supports manual and automated RLUSD operations as a platform for issuing, redeeming, and managing the token. Introduced July 23, it provides a web interface and application programming interfaces for initiating redemptions, checking balances, and tracking transactions.
Custody and Financing Broaden DriveWealth’s Ripple Integration
DriveWealth is also working with Ripple on digital asset custody in Europe, with further markets planned over time. Custody means safeguarding assets on their owners’ behalf. Separately, Standard Chartered began RLUSD custody on the XRP Ledger on Oct. 12, expanding bank safekeeping for eligible institutional holders. DriveWealth’s treasury integration would provide a consolidated view of dollars, stablecoins, and crypto, with transfers between them.
The companies are exploring equity financing through Ripple Prime, an institutional brokerage business providing trading, clearing, and financing services. Its Delta One operation offers equity derivatives including total return swaps, contracts providing economic exposure without direct ownership of the underlying asset. That existing business covers U.S. equities and related financial contracts, providing the basis for the exploratory discussions.
Ripple’s regulatory footprint spans more than 85 licenses, the announcement states, supporting a business supplying blockchain services to financial institutions. The companies will discuss the partnership during a fireside chat at Ripple Swell, Ripple’s annual conference for financial institutions and blockchain businesses, in New York City on Oct. 28.
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