Brad Garlinghouse On Ripple Stablecoin, XRP Token Buyback, & What Happens If Clarity Does Not Pass

Nice to see you.

Good to be back in Vegas.

I remember it well.

I'd say organized. And just look at this crowd. I mean, it's indicative I think of how far we have come.

I still think the opportunity ahead is even further, but it's been an amazing journey to watch. And obviously some of the regulatory stuff has been a very important part of the chapter of the last four years. I'm sure we'll get into that a little bit, but it's really magical to see the number of people that are here, the engagement level, seeing the XRP brand up and down the strip. It was pretty cool, you know, because usually XRP Las Vegas happens at the same time as Bitcoin, and you know, the Bitcoin conference is in Vegas, but I think this year you really knew the XRP conference was in Vegas, maybe more so than Bitcoin.

I guess I asked for that.

But look, as you guys have heard me say before, I believe in a multi-chain world. I do think, you know, you're seeing the bear market impact and I didn't go over to the Bitcoin conference this year. I did last year. But look, the energy from the XRP community is palpable. I will say one thing that's kind of interesting that is not widely known. Do you like this isn't a public announcement, right? We're just talking just two of us. Who here has gone to the sphere? Okay. I'm calling for an XRP boycott of the sphere. And I want to tell you why. We tried to do XRP on the sphere. We thought that'd be pretty cool. They said they would do Bitcoin and ETH and not XRP.

And the way I look at it, thank you to our chief marketing officer at Ripple. It actually ended up saving us money because we spent all that money up and down this trip and it's like it worked out better.

It was not clear. Someone was making a judgment within that organization and we thought about kind of escalating but honestly when that stuff happens I'm just like you know what we'll take our money elsewhere.

We have fought a number of good fights. You know, I sometimes refer to the XRP army as the XRP family, right? But sometimes we have to go to war and then it's the XRP army and then the army shows up. Yes.

Yeah. Crazy. Thank you.

Fighting the fight. Yeah.

For sure. And look, at some point I think you know there'll be maybe books written about the whole experience, but it's crazy to look back on that experience. And I do think some of the behaviors and I mean you I think emerged into this landscape during that fight, but you know I also I'm an optimist. I focus on some of the good stuff. And I mean I tweeted about this like the difference of Paul Atkins to Gary Gensler. It's just like wow. You know, in less than a year they provided structured clarity around a whole bunch of stuff. And you wonder like Gary Gensler was there for four plus years. Why didn't you take the time, you know, like you just hired more lawyers to go sue people as opposed to actually let's write down what how we view this. And even if I disagreed with it, at least it's clear. And in retrospect, you know, I really do think there I don't really understand why they made some of the decisions they did in that era.

By the way, I thought your questions were Ashish's. But at Ripple I get made fun of for stealing my team's thunder. Well, Ashish stole a bunch of my thunder today.

Yeah. He was talking about the Clarity Act.

Yeah, I thought he was great. He did outdress me. Like I went and he wore a tie. Like when he's now like a public company CEO, so he can't say I can actually.

Oh, we can't say that word anymore. Yeah, I've never sworn on stage. I don't know if I'm gonna start now. That got a lot of attention. That I don't regret that though. Some of you guys know I wore a t-shirt to a speaking engagement at Cantor Fitzgerald conference in Miami. I wore a sport coat, but underneath the sport coat, I wore a t-shirt that did say F the SEC. Yeah. And you know, yeah.

Look, I always thought it was kind of funny and strange that people questioned Ripple's commitment to XRP. Today, you know, Ripple is still the largest holder of XRP on the planet. We are the most interested party in seeing XRP be successful. We will continue to be the most interested party in seeing XRP be successful. And so whenever I read people kind of questioning that, I just think like you don't it doesn't make sense logically and it's obviously not what I've said publicly. And Ripple's extremely committed to how do we make XRP the most useful digital asset? How do we make it the most liquid digital asset? How do we make it the most trusted digital asset? And if we can do those things at the same time by selling products and services to financial institutions to capital markets around what we now call Ripple Prime, right? I mean Ripple Treasury has been on a tear and by the way the other thing people don't know part of the reason why we did the XRP and Ripple Treasury ads on the strip is the main competitor to Ripple Treasury is called Kyriba and they were doing their customer conference last few days here.

Yeah, we a little trolling. Never hurt anybody. We had some wrapped buses that said Ripple Treasury picking people up from the Kyriba conference.

Look, I get it that I also, and you know, maybe this is somewhat frustrating to the XRP community sometimes, but I don't feel the need to constantly update the whole world about our strategy because to some degree that just informs people who want to compete against us. And so, you know, look, we're gonna do things that may not at first blush make crystal clear sense that but I swear to you, even if it doesn't have a direct line from point A to point B, point B being good for XRP, it may be point A to point B to point C. It's all in service of how do we do things that expand, grow in driving liquidity, utility, and trust in XRP. And I will keep saying those things. We'll keep building around that. I mean, Ripple now is 1500 people strong. We're having a record year in a ton of different ways.

We did do a around the world trip, which by that was I'm not doing that. That was too hard.

We did Dublin, London, Singapore, Sydney in one week, which is not that was too much.

I mean like I've talked about this a little bit before. I mean there's a bunch of things that Ripple doesn't focus on that I think and you Ashish I thought did a great job talking about some of these. The tokenization of various asset classes I think is inevitable. There's a bunch of things around that that are outside Ripple's scope and we want to see other people pursue. Some of those people are obviously the XRP ledger and some of the vision that the David Schwartzes of the world had 13, 14 years ago is just unbelievable to me. You know, it really was the first decentralized exchange. The innate organic tokenization frameworks of issuing assets are kind of built in at the base level. There's a bunch of industries I don't know that much about. I read about things like bond settlement. Bond settlement is slow. It is arcane. And it is absurd to think about how that works in a world of the internet. And I think it's only a matter of time before you see things like bond settlement move to onchain. And you know to the extent Ripple could help catalyze those things to leverage the XRP ledger, fabulous. But again, I don't want to leave people the impression it is going to be a multi-chain world. The XRP ledger is exceptionally good at some things and not good at some other things. And that's okay. Like that almost by design, like that's good because if you try to be all things to all people, you're going to be less good at other things. You're going to slow the transaction speed down. You're going to impact cost per transaction. We have an amazing underlying infrastructure that's really good for certain things and let's invest and go after those things.

The last so Ripple did a share buyback at a mark of $50 billion.

Well, I mean so a long circuitous way like another example of tokenization dynamics. The private markets for secondary private companies is not efficient and you know some people unfortunately got caught up in this room I'm sure got caught up the Genesis bankruptcy which you're linked to today owns a bunch I don't I think you know a few thank you I didn't know exactly you know 3% of Ripple's equity which is great right. Now that being said now that they're in this bankruptcy Ripple's in kind of this awkward position where it's like do we keep it at arms length. You know, I think some people would like to see us buy that 3%, but then we're in some ways at odds with the community that owns it because we want to buy it back at the cheapest possible price. That's our fiduciary obligation, but they want to get the maximum price. So, the likelihood is we just look, let's let Genesis do Genesis. It's kind of I think wrapping up through the bankruptcy process and there's a structure to sell some of those shares and yeah the secondary market will go in however it goes the long-term dynamic you know we have not prioritized going public as a for a whole bunch of reasons I mean one of them is if you've paid attention to IPOs like BitGo and Gemini these haven't done particularly well.

Kraken has purportedly delayed their IPO. And so like we're just not in a big hurry to go down that path. And I mean I obviously was joking a little bit about Ashish is now a public company CEO. There's benefits to being private. Like I could get up here and not kind of say whatever the hell I want to say. And you know, I'm not I mean within reason, well, I don't know, but you know, I'm not going to get a call from the SEC or my incredibly talented legal team saying, 'Brad, you can't say that shit.' They say these sometimes anyway but.

Well I mean look I hope XRP holders feel like they are benefiting from Ripple's existence by virtue of what we're doing to try to catalyze things within the XRP community right. You know is there a scenario if and when Ripple goes public would we do something special for people who hold XRP or something maybe But I mean that's not in the immediate term. I view that as kind of like but I mean to some degree you're asking and let me be clear. I freaking love the XRP family. It is such a like and so like I want to do things that are good for the XRP community. Like it is a driving mission and I hope that when Ripple's thinking about an acquisition, we're thinking about it as okay, how does that catalyze things within XRP? How when we make investments outside of Ripple, how does that Yeah. How do people adopt XRP? When we help partner, we want a really high class, high quality digital asset treasury company like Evernorth to exist. We think that's good for the community. We think it's good for Ripple shareholders. We think it's good for everybody. And so yeah, we want to see that happen and we'll continue to lean into things like that.

I thought you were going to talk about the Clarity Act.

So, the conditional approval, you know, there's certain things Ripple has to do to kind of the conditions, if you will, and those are all things that within our control, and so, we feel very good about that. First of all again I think it's a direction of travel of seeing Washington lean into and be supportive of this industry is a very positive sign. We focused our existing OCC conditional approval around what we're doing with RLUSD the stablecoin and so to have it regulated both with the New York Department of Financial Services NYDFS as well as at the OCC federal level to some degree it's belt and suspenders we want to be the most white hat around stablecoins as possible because of our institutional customer base and we think that has served us well and you know we're going to continue to lean in. Now I think that the other part of your question maybe is what else we might want to do there. I mean look we're deep in the payments business and.

The Fed master account is very much on our radar and we think that would be a big unlock for sure. So we're going to continue to pursue that.

I'm going to dodge that question. I'm going to be transparent that I'm dodging it.

Yeah. I'm not even being artful about it. I'm just telling you I'm dodging it. I mean, look, Ripple believes that you can zoom way out. The United States benefits from better financial services infrastructure. Blockchain is a major unlock. People still discount how big that change will be. Payments is a big one. Getting access to a Fed master account, I think, is good for the United States. I think we'll get there.

So, look, I mean, I have gotten way too knowledgeable about how this works.

The good news has been Ripple has an absolute full seat at the table and our voice is respected, our voice is heard and people care that we are involved. I think people have seen that and that's totally true. I'll be transparent that the frustrating part for me is we were on the finish line three months ago in late January. We were on the finish line and I think honestly Brian Armstrong team Coinbase was like pause you know let's slow this down a minute and I think what they didn't calculate well is that in doing so you create a little bit of a vacuum and in Washington when there's a vacuum fills it right. And so now you get objections I mean like the amount of things and I think you know this well also but like the number of things that have become problematic for the Clarity Act. It includes housing because of a certain senator for a Republican senator that you know cares about housing. And so like how does a housing trade impact the Clarity Act? So the frustrating thing is we were on the finish line. It wasn't perfect and I'll be the first to admit that, but it was pretty good. And it's frustrating to me we find ourselves where we are. I am still hopeful. I'm using that word a little bit different than optimistic. I'm still hopeful and there is still momentum. But man, watching the sausage get made in Washington is tough to watch.

Yeah.

Well, it's grandfathered in two ways. And the most important thing, I know Ashish talked about this. I want everybody here to make sure they understand. XRP has clarity. XRP fought a very painful fight to get clarity where a it's a big deal. We have a federal judge said in her opinion XRP in and of itself is not a security. Boom. We have clarity. Like that's what we care about. Ripple has leaned into supporting the Clarity Act because we think it's good for the industry. It's if we want the largest economy in the world, the United States, to lean into crypto in the way that help, it's good for Ripple if that happens. But XRP has clarity. And so again, there's a certain irony that people talk about. I mean, look, I've chosen to ignore Charles Hoskinson on all this stuff. I'm just like, it's like I already have clarity. Like I'm supporting this because I think it's good for the industry. And there's a lot of noise out there. I hope it passes. If it doesn't pass, I think that's unfortunate for a lot of other players in the industry in the United States. And I think what's hard is when I go and talk to CEOs of banks or very senior people banks, they're nervous that the next administration when Paul Atkins is not there that some of these things that are just guidance can change.

And I get it. Like if you're a big financial institution that's had to deal with an SEC that has fined them billions of dollars, you're like, they don't want to take a chance. And so if we want the largest economy in the world to lean in, if we want the US to be as competitive as some other countries around the world in these technologies, we need the Clarity Act to pass.

For sure. I mean my own personal view is we as you introduced in the question we have a few weeks and either this gets out of committee in the Senate the Senate Banking Committee if it doesn't get out in the next few weeks it's not going to happen anytime soon.

We've invested a lot.

I mean XRP is going to be okay. No matter what. I mean, obviously the SEC CFTC announcement around the guidance was really positive, but again, you got to always go back to an independent federal judge. She was clear. She happened to be an appointee by a Democrat. So, it's kind of like, look, XRP, you guys, good news. We're good. XRP has clarity.

Look, we will continue to lean into pro-innovation, pro-crypto candidates on both sides of the aisle. And you know like I have been very appreciative that we have in the White House a very pro-crypto administration but the laws are passed by Congress and we want to see bipartisan support. I you know I've said this a lot publicly but as you know well the fact that a technology became partisan is just madness. It's just crazy to me. Like, well, it's almost like saying, you know, email is a partisan issue. Like, somehow you hate email because you're a Democrat, but you like email because you're Republican. Like, it makes no sense. And it really does start, I think, you know, for people that are here from Massachusetts. Senator Elizabeth Warren like made this an issue by saying, 'I'm declaring war and I'm raising a crypto an anti-crypto army.' Like, why? I find it crazy. But.

Oh boy. Well, like I feel like I already answered that.

You didn't give a month. What's today? Basically April 30th. I will give it to the end of the third week in May. If I don't know what the exact date that is. If it doesn't get out of committee by the end of the third week in May, I think we're in real trouble. If it gets out of committee, we're good because it will pass the Senate if it gets out of committee. There is bipartisan support at the Senate level if it gets out of committee.

Well, that's a bigger problem, I think, in the committee than it is on the Senate floor.

You want to be next time. All right.

Thank you.