Ripple's Mission To Revolutionise Payments with Brad Garlinghouse $XRP

I think the thing to always remind entrepreneurs is when you're successful, the highs are higher; when you're feeling not successful, the lows are lower. Many of the leaders you probably on here have told you it's not always all glorious and fun. Some of the battles are public and well known. The United States SEC sued Ripple, they sued me, they sued Chris Larson, and that's not fun. But being committed to a point of view about where the world's going and having the wherewithal to kind of stand up to that was a very public example of the plight of being a CEO.

I'm great. It's good to be here. Thank you for inviting me. And for us, I'm sure one of the things we'll talk about, but an exciting day—we finally are going live with our stablecoin tomorrow, RLUSD. So a lot of excitement inside the Ripple building, as you might guess, but happy to be spending time with you guys as well.

I mean, Ripple—I joined Ripple in 2015, and almost from the beginning, in the earliest times that I remember first meeting Yoni, Ripple has been focused on serving that infrastructure layer around particularly cross-border payments. Obviously, there's a lot of opportunity for crypto in the payments industry at large. When Ripple kind of looked at this and we looked at the unique attributes of XRP, kind of the digital asset native to our tech stack, we felt like cross-border payments is an area where there's a ton of friction, a ton of cost. I think eToro knows this well given their very global business, and I imagine both of you, Sam, you've dealt with this personally in some way. The antiquated system generally referred to is a SWIFT wire transfer. It was designed 50 years ago. It tends to be rather slow, expensive, and error-prone. So we started focusing on that, and from there have really expanded into other aspects of that infrastructure layer. We acquired a custody company that now is the business we have around Ripple Custody, and it's really serving the same set of customers—financial institutions and banks—and enabling them to safely and effectively custody crypto, not just XRP but beyond that as well. And then finally, of course, the stablecoin business, which we announced our intent to launch months ago, but finally are coming live here in the next 24 hours.

Yeah, I'm glad you asked this because I'm always amazed as I travel the world how there is still confusion out there. People will say to me, 'I invested in Ripple,' and I'm like, 'No, you probably invested in XRP.' So Ripple is in many ways kind of a quintessential Silicon Valley tech company. We raised a seed round of capital way back in 2012, a Series A investment in 2014, and then a Series B in 2016. We have always, since those early days, kind of focused on—our customers are going to be enterprises, financial institutions—and we use XRP in part because we own a lot of XRP. XRP is an open-source digital asset, not dissimilar to Bitcoin or ETH. It's on hundreds of exchanges around the world. It uses a different mechanism for validating transactions where instead of proof of work or proof of stake, it uses something called a consensus mechanism, which allows it to be very scalable in terms of speed of transaction, cost of transaction, and just overall scalability. So we felt like it worked well for cross-border payments. So there's Ripple, the company; there's XRP, the digital asset; then there's XRP Ledger, XRPL. The reason why we kind of call that out sometimes is Ripple is one important participant in the XRPL ecosystem, developer of XRPL-related technologies, but there are obviously a whole bunch of others, as you would expect in an open-source community. We're seeing other participants do some really interesting stuff that sometimes we're involved in, sometimes we're not involved in. So it's important for people to kind of understand the separation and distinction between those for sure.

Probably all three, depending. I mean, it annoys me when it's someone who I kind of feel like knows the difference or should know the difference, and I feel like they're just contributing to the confusion. It's also like, I get it. In the evolution of crypto, until probably 2019, I think CoinMarketCap, they would put Ripple's next to XRP. So it's kind of you're rooting out the original patient who is spreading the virus from the earliest days and correcting that. And look, we still find exchanges around the world that mischaracterize what is XRP. The good news is I think people want to find those, you make those corrections and make it more clear to everybody—developers, speculators, investors, the whole gamut.

Well, I think part of the transition from maybe more speculative retail into more institutional adoption and participation is the ETF step. Certainly, the Bitcoin ETF getting approved—the SEC was dragged kicking and screaming a little bit towards that outcome—but getting the Bitcoin ETF, I think, was a monumental event in terms of expanding the ability for others to participate, particularly institutional investors. To me, I think I said then publicly that people would ask me, 'Is there going to be an XRP ETF?' and I just like, look, it's inevitable that there will be an XRP ETF. And now I think there—I actually don't even know—I think there's four or five different filings here in the US. I know at least one in Europe. And I think it's great. I think it's again not surprising. I certainly hope that we'll see some of those approved soon and we'll see them trading so others can participate in the ecosystem that otherwise might not be able to because they don't want to custody crypto themselves or other reasons that may exist. But I'm excited for sure, and I think it's a great sign not just for XRP but for crypto broadly. I will say, and I think many people know this, but the best-performing ETF in the history of the United States was the Bitcoin ETF in terms of how quickly it hit 10 billion in assets. Which I think again, for those that think that, oh, crypto, there's not that many people, it's not that interesting, institutions will never do it—every time the naysayers are proven wrong. And I think as Yoni and I both kind of seen some of these cycles come and go, I think this cycle has a lot of momentum, a lot of breadth globally. It's not just retail, and I think we'll continue to see this cycle continue in a positive way. I frankly think people have underestimated how important having the United States SEC go from an active antagonist and a lot of headwinds on the market to really tailwinds as a very important US regulator. I think we still have a lot of room to run on that.

Yeah, and if I may just jump in, I agree with Yoni. I will add to that. I think one of the things that I remain very bullish and excited about for the next chapter—I agree that the breadth of the bull cycle here, the length often changes, evolves. Mass adoption comes from when users don't have to think about how it works, what the backend infrastructure looks like. If you compare the cycle of the adoption of the internet—some people say, oh, the internet kind of was born in the late 90s. It's like, well, actually, the internet was born in the early 70s in kind of a US Department of Defense ARPANET, and then it evolved in the 90s because it became a whole lot easier to use. You went from really defense and military to the added universities, then along comes HTML and HTTP and SMTP, and all of a sudden it was now usable. And then you went through 20 or 30 years of growth that we're seeing and experiencing today. The internet as we know it—I think we're still in the 70s and 80s of blockchain and crypto. It's still kind of hard to use often. We've all probably sent crypto to somebody else and you send a small transaction to make sure it goes through and you're like, 'Okay, did you get that?' There's a whole bunch of things that I think will get easier. And by not—I want to say hiding the backend—it's just if we want mass adoption, we need to make it easier across the board. And that's when the utility and the opportunity keeps growing. And I think we still underestimate how big this could be in the next decade or so.

Yeah, I think there's no doubt Ripple has always viewed ourselves to some degree, and consistent with what Yoni described, as kind of a bridge between traditional finance and decentralized finance. Said another way, it's like, okay, here's the legacy infrastructure, with a new infrastructure, there needs in our judgment to be bridges between those. Some in crypto I think early on were really much, 'Hey, there's going to be a separate, distinct, and it's going to be independent, and that one's going to win over time.' It's like, you're going to have a blended infrastructure for I think a very long time. And Ripple's really tried to enable that, as Yoni described, in working with financial institutions, enabling them to use these technologies. But really, if you go back in time, the XRPL, the XRP Ledger, was all about tokenizing and enabling the transfer of any type of assets. It really—it was the first decentralized exchange, DEX, that was available. And we find ourselves, I think, in a really—and part of the excitement about what's going on in XRP right now is without the headwinds of the SEC, some of those tools and capabilities that have always been there are now unlocked in a way that we don't have the headwinds of the SEC fighting with us about it. And I think particularly around some of the tokenization of other assets and leverage of a DEX, it really plays into where the world is today and where the world's heading.

Well, look, one of the things we do think a lot about is we want to be the most effective and impactful participant in the XRP ecosystem. We are one very large player in the ecosystem, but one measure of that is how much liquidity is there, because the more liquidity there is on more exchanges, the more useful the overall XRP ecosystem is for every individual participant. So certainly eToro—and again, I've known Yoni for a bunch of years—and their support of and advocacy around XRP has been important for sure. We're fortunate, I think XRP is listed on around 600 or 700 exchanges around the world now. And we work within our products, as your question's about, we work with some exchanges around the world to actually enable the enterprise onboarding, offboarding, and kind of what some people call the last mile—the ability to intersect with that traditional financial infrastructure remains important. And certainly the eToros of the world driving liquidity and frankly just helping educate—events like this, helping educate people who are interested in the ecosystem about what's going on—I think is very valuable. We need more kind of top-tier exchanges like eToro out there.