Ripple Expands into Leveraged ETF Swap Financing

Ripple, a cryptocurrency payment company, has made significant strides in the financial sector by entering the leveraged exchange-traded fund (ETF) swap financing market. This sector has traditionally been dominated by large banks, but Ripple's recent expansion into stablecoins and asset custody positions it as a notable player. Leveraged ETF managers utilize total return swaps and other derivatives to amplify daily fluctuations of specific stocks or indices, with banks and brokers facilitating these transactions and charging associated fees.

The United States currently has 593 leveraged ETFs managing over $256 billion in assets, with 426 of these being single-stock leveraged funds that received regulatory approval in 2022. Ripple's entry into swap financing follows its acquisition of the prime broker Hidden Road, which specializes in serving cryptocurrency hedge funds. This operation has been rebranded as Ripple Prime, and it is actively collaborating with various ETF providers while aiming to broaden its reach to include other investment managers, such as hedge funds.

On October 6, 2026, Ripple Prime announced a partnership with the hedge fund Brevan Howard, offering prime brokerage, clearing, and financing services. Ripple Prime President Noel Kimmel highlighted the growing significance of this segment for the company. Reports indicate that a fund recently engaged Ripple at a financing rate of 4 percentage points above the overnight bank financing rate, which was approximately 8% of the fund's assets on an annualized basis, in addition to a management fee of around 1%.

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Source: KLEA News