CEO, Ripple
Brad Garlinghouse, CEO of Ripple talks about SEC's lawsuit against Ripple on Power Lunch CNBC
Brad Garlinghouse, CEO of Ripple talks about SEC's lawsuit against Ripple on Power Lunch CNBC.
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 (9 segments)
✨ AI-enhanced transcript with speaker attribution
T
Tyler0:00
As we bring in Brad Garlinghouse, the CEO of Ripple, for a first on CNBC interview. Brad, welcome, good to have you with us. And this is an interesting story; I'm going to pick up where Kate just left off, which was the idea that investors may have thought that in buying XRP, they were buying a security that gave them shares or some ownership in Ripple. Why is that wrong on its face?
B
Brad Garlinghouse0:30
Well, first of all, Tyler, thanks for having me. I think this is an important issue, and I think there has been confusion out there. Ripple, the company, as Kate introduced, we have shareholders; we've raised capital from venture capitalists, from actually institutions and even banks like Standard Chartered as a shareholder. XRP is a separate thing altogether. It is a currency that trades in the marketplace. In the last eight years, over a trillion dollars of the currency has traded. And so what we find is, you know, the SEC, in my opinion, having watched this for many, many years, taking a position now that is, frankly, I think, with one foot out the door a little bit, incredible to kind of take the position after eight years.
T
Tyler1:11
There are a variety of cryptocurrencies, including XRP and obviously Bitcoin and others. Why do you think the SEC has—is it something in the structure of your business that makes the SEC concerned that there may be a securities violation of some sort in here? What's different about the way you are structured that would cause them to potentially file a suit?
B
Brad Garlinghouse1:39
Well, about two and a half years ago, a little over two and a half years ago, the SEC came out proactively and said they did not view Bitcoin as a security; they viewed it as a commodity or currency. Shortly thereafter, they came out and said Ether, the second most valuable cryptocurrency, is also not a security. They then have spent the last two and a half years going after, kind of, enforcement by saying that certain initial coin offerings were securities offerings. Actually, I've spoken out in favor of that because I think in many cases those were, in fact. XRP, however, is almost indistinguishable from what is Ether in terms of its decentralization, in terms of the breadth of activity. It's traded on a couple hundred exchanges around the world, and what's amazing to me is not a single other current country anywhere has looked at XRP as a security. You've had countries like the UK and Japan and Switzerland and Singapore all come out and say things that make it clear that XRP is a currency. Actually, one of the nuggets I think is even—sorry, even here in the U.S., the Department of Justice has viewed XRP as a currency, and the Department of Treasury has viewed XRP as a currency. Sorry, Kate.
K
Kate Rooney2:51
That's right, Brad. Kate here; good to see you. Thanks for coming on. I want to ask you—you mentioned some of those exchanges. I want to ask you about the broader implications for others in the industry. Coinbase is a big name we talk about a lot; they see about 12 percent of their trading volume in XRP. That company is about to IPO. What would this mean to some of the global exchanges that hold XRP or facilitate trading of XRP on those exchanges?
B
Brad Garlinghouse3:14
So about 95 percent of XRP trading happens outside the United States, on exchanges around the world, and so that's outside of the United States SEC jurisdiction. For exchanges like Coinbase that are based here in the United States, one of the reasons why I view this as something that's broader than just, hey, what does this mean for Ripple and XRP, it's what does this mean for the crypto industry here in the United States. The SEC is really picking winners; they're saying there's a duopoly of Bitcoin and Ether are the two digital assets, the cryptocurrencies that will be not regulated by the SEC here in the United States, and it really, I think, sends an ominous sign for innovation around cryptocurrency. The United States picking winners in general has not been something the U.S. government should be in the business of doing.
K
Kate Rooney3:57
What will happen? You mentioned before that XRP could really go on without Ripple—you know, if you guys sold all of your holdings of XRP, that cryptocurrency could survive. Would you ever consider doing that, divesting all of your cryptocurrency holdings and really focus more on your enterprise payments business? Is that something that Ripple has considered or could do?
B
Brad Garlinghouse4:21
It's certainly, I think, one of the ironies of all this is that for XRP to be a security of a company, the company has to exist. And the point that I have made at various times is that if Ripple, the company, didn't exist, XRP would still thrive around the globe with, you know, a couple hundred exchanges around the world, and there's over a hundred different projects, innovative entrepreneurs here in the U.S. and around the world building on top of XRP. And the reason why they're doing that is because XRP is far more efficient in terms of speed, in terms of cost to settling transactions, and using it really as a currency. The power consumption has been widely reported; a Bitcoin transaction is dramatically different and, you know, costs a lot more.
T
Tyler5:02
All right, folks, we got to leave it there. Brad Garlinghouse, thank you for your time today; I'm sure this will be one we'll be following up on. And Kate Rooney, thank you as well. Thank you both. You bet. All right, Tyler.