Ripple has published a white paper for the digital asset industry arguing that a digital prime brokerage model could address core inefficiencies in crypto market structure. In its view, the sector still runs on an exchange-centric setup where many platforms combine trading, custody, and credit functions. That leaves institutions dealing separately with multiple exchanges and liquidity providers while pre-funding accounts at each venue, a structure that fragments collateral, raises margin requirements, and adds operational strain.
Exchange-led market structure leaves institutions juggling risk
Ripple contrasts the current crypto setup with traditional foreign exchange markets, where prime brokers and central clearing institutions simplify credit arrangements and post-trade operations. Digital asset markets, by comparison, still require institutions to manage counterparty exposure, settlement arrangements, and account funding across several venues on their own. That setup, according to the report, reduces capital efficiency and makes compliance and operations harder to manage.
One intermediary would handle routing, credit, and settlement
Under the proposed model, institutions would interact with a single credit intermediary instead of connecting directly to numerous exchanges and liquidity sources. Trades could still be executed on selected venues, but routing and settlement would run through the prime broker. That would shift counterparty risk and settlement management to the intermediary. Ripple says centralizing these functions under one master agreement could standardize documentation, simplify compliance obligations, and improve visibility into counterparty exposure.
T+1 net settlement sits at the center of the proposal
A key part of the framework is a standardized net settlement process, often built around T+1, meaning settlement takes place one day after the trade. Instead of settling each transaction separately, trades across venues would be aggregated and only net obligations would move. Supporters of the model say this could release trapped capital, allow collateral to be used across positions more efficiently, and make funding costs easier to track. Market participants also argue that consolidating exposure to one counterparty, rather than handling risk venue by venue, would simplify onboarding and collateral management.
Ripple ties the model to broader market development
Ripple states in the paper that replacing today’s fragmented exchange environment with a centralized prime brokerage model could ease both operational complexity and capital inefficiency. The company also says a more unified market infrastructure could strengthen the connection between digital assets and traditional finance, making integration between the two easier.
On regulation, Ripple CEO Brad Garlinghouse said prospects are high for the U.S. Digital Asset Market Clarity Act to be enacted by the end of April. He said such legislation could materially reduce the regulatory uncertainty that has weighed on the sector for years. Discussion around the digital prime brokerage model is continuing across the industry, with attention focused on whether it can improve transparency and reliability for institutional participants in crypto markets.