CEO, Ripple
Xrp Ripple is Future For cross border payments - Brad Garlinghouse
Website : https://4iz4.com
Disclaimer: ALL INFORMATION CONTAINED ON THE CHANNEL IS FOR GENERAL INFORMATIONAL USE ONLY AND SHOULD NOT BE RELIED UPON BY YOU IN MAKING ANY INVESTMENT DECISION. THE CHANNEL DO NOT PROVIDE INVESTMENT ADVICE AND NOTHING ON THE CHANNEL SHOULD BE CONSTRUED AS BEING INVESTMENT ADVICE. BEFORE MAKING ANY INVESTMENT CHOICE, YOU SHOULD ALWAYS CONSULT A FULLY QUALIFIED FINANCIAL AND/OR INVESTMENT ADVISOR
About Brad Garlinghouse
Brad Garlinghouse, CEO of Ripple, has been active in public discussions about cryptocurrency regulation, stablecoins, and the company's business strategy. He criticized JPMorgan CEO Jamie Dimon, stating that Dimon has "been dismissing this industry for decades" and suggested Dimon is trying to protect JPMorgan's profitable payments business by opposing the CLARITY Act. Garlinghouse described Dimon's comments as "either intentionally misrepresentation or negligent." He expressed optimism about the CLARITY Act, predicting in late April that if it does not get out of committee by the end of the third week of May, "we're in real trouble," but that it would likely pass the Senate if it clears committee. He later said the chances of passage were around 80%, noting that prediction markets had reached the same figure. Garlinghouse also discussed Ripple's business developments, including the launch of an AI developer toolkit and the growth of its stablecoin, which he said had become a top-five stablecoin by growth 18 months after launch. He predicted the stablecoin market cap would reach $3 trillion by 2031. Regarding AI, he called layoffs attributed to AI a "travesty," arguing that AI is an "unlock and enabler" for growth rather than a tool to reduce headcount. He stated that Ripple has not prioritized going public and that the company remains focused on enterprise clients, including banks and payment providers.
Transcript (17 segments)
✨ AI-enhanced transcript with speaker attribution
M
Monica Long0:08
Hi, welcome to our Q4 Ask Me Anything. I'm Monica Long, head of marketing at Ripple. I'm here with their CEO Brad Garlinghouse to ask him anything.
B
Brad Garlinghouse0:19
So, Brad, as the clock winds down on 2018, what's on your mind?
Three things come to mind. One, big picture state of the markets. It's been in many ways a tough 2018, the industry people talk about crypto winter. The second thing I think a lot about is the state of the regulatory environment globally. The third thing is really just the growth of Ripple. 2018 has been a heroic year for Ripple. If you had told me a year ago - and I'm sure we did one of these about a year ago - where we were going to be today and I could talk about how far we have come in terms of employee growth, customer growth, volume growth, I would have felt really good about that evolution.
M
Monica Long0:56
Let's start with that first topic, state of the industry. What did you predict in 2018 that played out well?
B
Brad Garlinghouse0:59
There are a couple predictions I made that I think I got right, and maybe one or two I got wrong. I think we at Ripple, and certainly I specifically, were relatively early in predicting the demise of the ICO. I think I even came out and said I thought some people doing these ICOs would end up in orange jumpsuits. I don't seek that for anyone, but there have been clearly some bad actors committing some frauds, and I think even some of the better actors were circumventing securities laws. We've seen that change dramatically, so I think that prediction was right. Frankly, a prediction that team Ripple has made over the years and continues to be true is the importance of regulatory engagement. That was certainly something we saw in 2018, and that continues to be fruitful for team Ripple. One prediction I made that I think I got wrong: I really thought 2018 was going to be a year where you saw increasing participation in the digital asset markets from institutional investors. We haven't really seen that. It's been a very, very small amount, and I think that's largely because the industry hasn't quite matured to the point where they can participate. So I'm going to push that prediction off to 2019.
M
Monica Long2:20
As we look forward to next year with regard to that, the coin ETFs have been in the news quite a bit this past year. Any prediction you want to make around when that may happen?
B
Brad Garlinghouse2:27
I'm going to probably dodge this question a little bit, only because I think it's a hard one. The SEC in the United States has a really hard job, and what they've said so far seems to hinge upon the risk of manipulation of a Bitcoin ETF. Frankly, I don't think 2018 helped that. We saw more concentration of mining power amongst fewer miners in the Bitcoin ecosystem, and I think that increases the risk of manipulation. So I certainly would like to see instruments like ETFs enter, particularly for the ability for institutions to participate, but I think the SEC has a hard job on this one. Because it's a hard topic and I don't really have a strong point of view on where it's going to play out, I'm not going to make a prediction.
M
Monica Long3:15
Okay, well, what do you think will happen in 2019?
B
Brad Garlinghouse3:18
A couple predictions. One or two of them I've talked about at least a little bit publicly. Just a few days ago, I tweeted publicly about the importance of transparency in the overall industry. If we want it to mature, we have to hold ourselves to higher standards. There's a lot of stuff in the industry still that is clandestine, and because of the origins of crypto, there are people who operate without transparency, without clarity. I don't think that's good for the industry or for the desire for institutional investors to come into the industry. So one of my predictions is that we will continue to see increasing transparency in lots of different projects. I also have predicted that by the end of 2019, you'll see banks - traditionally defined banks - actually hold digital assets. I think that's only a matter of time. Banks are profit-motivated entities, and to the extent they see an opportunity to grow their business, you will see banks do that.
M
Monica Long4:26
The second big topic on your mind as 2018 winds down is regulation. Big year in the news for regulatory topics. What's on your mind?
B
Brad Garlinghouse4:30
We definitely saw increased regulatory uncertainty here in the United States, but increased regulatory clarity in other markets around the world. Ripple is a very global company, and the XRP ecosystem is very global inherently. You see markets like Abu Dhabi, the UK, Singapore, and even Thailand - the central banks and regulatory environments in those markets provide clarity around regulatory frameworks to engage. Japan is another country I'd highlight. The US hasn't had as much regulatory clarity. Early in the year, I think it was May or June, the SEC came out and said Bitcoin is not a security, and then shortly thereafter said Ether is not a security, but then remained silent. They looked at those two because at the time they were the top two market cap according to CoinMarketCap, and then they went after people at the other end of the spectrum - bad actors - but that has created some uncertainty in the United States. Having been here in Silicon Valley in the earliest days of the internet, the clarity and constructive engagement from the US government is one of the reasons why you saw a lot of development and investment in the earliest days of the internet. I think we want to see that in the blockchain ecosystem. We're going to need to get more clarity from the SEC. I think they have said they intend to make more statements about that in the coming year, which we're looking for too.
M
Monica Long6:02
I know you've answered this question many times before, but what are your thoughts on XRP - security or not?
B
Brad Garlinghouse6:08
I think it's very clear XRP is not a security. There are a whole bunch of base layer reasons for that. One of the most important is that if Ripple the company shut down, XRP trades on over 100 exchanges around the world and would continue to trade. Ripple is one important participant in the XRP ecosystem, but there are a whole bunch of participants. We highlighted a few earlier: companies like Omni doing interesting things using XRP as a payment mechanism. You've only seen that grow in 2018, and it grew despite the fact that there is uncertainty out there. So I think it's very clear that XRP is not a security. I appreciate that the SEC has a tough job and there are different dynamics in this space, but we are going to continue to work with regulators around the world and make sure they understand who we are, who Ripple is, what XRP is as an independent open-source digital asset, and make sure people understand the difference.
M
Monica Long7:08
Okay. Your third big thing was around RippleNet growth. Tell us what's the state of RippleNet.
B
Brad Garlinghouse7:13
I would even go so far as Ripple growth. Ripple had a heroic 2018. I measure that by employee growth - we have about 300 employees now. By activity in terms of customers: we grew in customer sign-ups. We announced in the last AMA that we were signing about two production contracts a week. I think there's a decent chance we will sign about 100 production contracts in the calendar year 2018. Given that we started in Q1 at a slower pace, we are finishing at a really strong pace, which is awesome. The third piece is volume. Volume obviously is ultimately what we're looking for. If you had told me a year ago that we would be where we are in terms of number of customers, number of deployments, 40 countries, six continents, I would have said no way. So we've made huge progress. I also recognize we've got a long way to go. But in a world where it's been a tough year for the blockchain ecosystem, I feel like Ripple had a heroic year. Even though a lot has changed, morale here is really high because people see we're solving a real problem for real customers, and we're able to do it with technologies that are really efficient at doing that.
M
Monica Long8:36
How do you, as a CEO, think about team growth so that we're scaling the team at an appropriate pace and we're not getting over our skis too much in terms of ballooning team size?
B
Brad Garlinghouse8:46
I'm really glad you asked this, in part because as you look around the ecosystem, we have seen in the last month or so some challenges as we go through this crypto winter. There are people who got ahead of themselves. You're seeing projects shut down, you're seeing people do layoffs. It has been important to me that we have taken a measured approach to our growth. I lived through the dot-com bubble and the winter that followed, and that was a really difficult time. It informed how I've thought about how we grow Ripple. We have grown at a pace that is commensurate with our growth of customers and volume, so it's put us in a really strong position as we wrap 2018. In terms of the network size and the value of the network, per Metcalfe's Law, it's the square of the nodes on the network. So we finished the year in a really strong financial position, a really strong product position. A year ago, we had one production product in the market, which was xCurrent. Now we have three production products in the market with xVia and xRapid. We are seeing customers sign production contracts on each of those products. In a year, that is really astounding.