There are few people who can generate the amount of excitement among the cryptocurrency community as Ripple chief Brad Garlinghouse. In front of a packed house at the Yahoo Finance All Markets Summit for Crypto in New York on Wednesday, Garlinghouse spoke with his former employer about his payments startup Ripple and XRP, the digital coin in which Ripple holds a 61% stake and which advanced a whopping 32,000% in 2017. He also revealed he is long BTC.
Garlinghouse used the forum to announce that payments startup Ripple just signed LianLian, Chain’s No. 4 payments provider, to its blockchain-fueled xCurrent platform for cross-border real-time e-commerce payments.
He expounded on cross-border payments, humorously pointing out that before Ripple’s xCurrent, to get £10,000 from New York to London on the same day, the fastest way would be heading to nearby Newark Airport and flying the money there. “xCurrent enables real-time messaging and settlement between banks,” he said.
Garlinghouse pointed to what he characterized as a “misunderstanding about digital assets” that pervasive today, giving an example from the dot-com era that can be applied to today’s cryptocurrency environment. He recalled how in his earlier days when he worked in telecom, he visited with then-SBC Communications executive Randall Stephenson, who today is at the helm at AT&T.
Back at the turn of the century, Stephenson told Garlinghouse that SBC would never use IP for voice traffic. “The point was, he said they had a robust analog switch network that worked for voice brilliantly” and that they invest in data. Garlinhgouse pointed out that today, there is no voice network at AT&T — it’s all VoIP.
“I think the same thing will happen in banking. People who are invested in us love xCurrent but they’re not sure about xRapid (Ripple’s product for liquidity.) I can hear the echo chamber of Randall Stephenson,” he said, adding he views xRapid as a crawl-walk-run product, pointing to the four current users that include payment providers MoneyGram and Mercury. “I think it’s just the beginning,” he said.
Overall he believes that the Congressional hearing that unfolded earlier this week on regulation and events such as Yahoo’s are signs of maturation within the cryptocurrency market.
“For me, it feels like 1997 and the birth of the internet when I was a young whippersnapper in Silicon Valley,” said Garlinghouse, adding: “Regulators are behaving as they should to make sure we have regulation around KYL and AML. There are reasons for that. If exchanges are trying to circumvent KYC requirements, [regulators] should come in and enforce that.”
Meanwhile, though Garlinghouse is long bitcoin personally, saying he is not of the came that “BTC dies some terrible death.” He doesn’t, however, see it solving the world’s payments problems, saying: “XRP is 1,000 times faster and cheaper than a bitcoin transaction. Are you going to use a fraction of BTC to buy a cup of coffee? It will take hours to complete the transaction. Your coffee’s gonna get cold,” he joked.
Ripple is a payments company that focuses on cross-border transactions, a market that’s largely powered by SWIFT for global banks. But as Garlinghouse points out, only a small number of banks dominate SWIFT and extract billions of dollars of profits from the rest of the banks in the interim.
“Ask why Jamie Dimon is saying things [he said about bitcoin],” said Garlinghouse, pointing to Citi, HSBC and Chase at the top of SWFT. “They are making a lot of money from other banks. We talk to banks, and 99.9% of them want Ripple to be successful because they’re sick of paying these guys,” he said.
In conclusion, Garlinghouse gave his view of the industry, which he says remains in the “adolescent stage.” It’s incredibly important for him and for the success of Ripple for the industry to mature, including media coverage. Meanwhile, he doesn’t view other blockchain startups as competitors.
“A lot of them go after different use cases, like the early days of the internet. Yahoo is not competing with Amazon. The internet needed to grow up. I want all businesses to rise. An important element of a mature industry is a maturation of all aspects of coverage,” he said.
Featured image from Flickr/Christopher Michel.