On Wednesday (May 25), Ripple CEO Brad Garlinghouse shares his thoughts on a variety of interesting crypto-related topics while being interviewed by CNBC senior technology correspondent Arjun Kharpal at this year’s World Economic Forum (WEF) Annual Meeting in Davos, Switzerland.
Below, are highlights of Garlinghouse’s comments during this interview.
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On 2017-2018 ICO Boom
“I think in some ways the ICO boom wasn’t particularly great for crypto, but you know some good things probably came of that, just like stablecoins. I said somewhat controversially around that period that I thought 99% of crypto — at the time there were 2,000, not 19,000 — would probably go to zero and that didn’t make me a lot of friends in the crypto world.
“Since then, I’ve been very wrong, I guess, because now there’s 19,000. So, we moved the other direction… It’s not clear to me whether there’s a place for all of these, but I also think as you go from first-generation technologies to second-generation, you get more specific use cases for specific types of solutions.
“And look, I think we even have seen with what’s going to NFT market. Yet, the gas fees associated with NFTs are in some cases astronomical. And are the underlying layer one technologies able to support NFTs in the kind of first generation? And I think we’re finding probably not. And we need to find better technologies that can support NFTs because I don’t think NFTs are going away by any stretch.“
On Crypto Regulation
“I certainly have said — and I think that the team at Ripple has said for years — the industry lacks clarity and lacks certainty. The overwhelming majority of people working in the crypto industry I think are good actors that want to do right by regulators, but when the rules of the road aren’t clear, it’s very difficult to manage within that.
“And so for entrepreneurs and investors to participate in these markets, to invest in companies in this space, you want that clarity and certainty. In the United States, we have been clamouring for that… I personally, was at the U.S. SEC office office four or five times in the years leading up to their decision to file a lawsuit saying that XRP… [is] a security.
“You have other countries that demonstrate how out of step the United States is with the really the G20. I mean, we talk about Switzerland here, we talk about Singapore, we talk about the UK, Japan, even the UAE is way ahead in providing that clarity and certainty that I think allows investors and entrepreneurs to build on these technologies.“
During this interview, when Bartiromo asked Garlinghouse to share his thoughts on the crypto market, he replied:
“Well, two quick thoughts on that. There’s no question there’s been a lot of turbulence to the crypto market. I think if you zoom out, though, over the last two years, you have to remember the Bitcoin was at about $8,000 two years ago, and today it’s, as you just pointed out, around $30,000. So yes, in between there, it hit $60,000, but this is a new market.
“I think there’s certainly been a lot of excitement about what’s going on in the market, and then sometimes that excitement gets ahead of the reality. For Ripple, we’ve been very focused on how do we use these technologies to solve real problems for customers. And those are the kind of solutions that I think will scale, regardless of what’s happening to the turbulence and volatility of the market.“
She then asked Garlinghouse to comment on potential upcoming crypto regulation. He answered:
“First, I’ll say here in Davos, when I came four years ago, crypto was considered a bad word. Today, that is dramatically different. And frankly, our elected officials that are here in Davao are some of the people speaking most aggressively about that.
“But there’s no question that regulation around crypto is still trying to find a solid footing, and finding the right posture for the United States. The United States has really been behind other G20 markets like the UK, like Switzerland, like Singapore. They’ve really been leading in establishing a framework that works for both investors as well as entrepreneurs, who are taking advantage of these new technologies and building the next generations of Google and Facebook.“
Someone then asked Garlinhouse to comment on Tether and the assets that back $USDT. The Ripple CEO replied:
“As you point out, stablecoins have been in the news because that was one of the catalysts that really drove the market a couple weeks ago. An algorithmic stablecoin kind of melted down if you will. Tether is a considered a dollar-backed stablecoin. I’m not personally involved with it. So, I don’t know exactly how they are sharing those financials, but I think now more than ever the transparency that companies like Ripple have championed across the crypto industry are critical.
“That transparency for Tether, I think, is to really make sure the people participating, people buying, have access to whatever financial information they need to feel comfortable that ,in fact, it is dollar-backed…
“I think the whole industry needs to be more transparent. I think that applies to Tether. I think that applies to the whole industry. From the earliest days, Ripple and the XRP community, we’ve tried to lead by example. We’ve really tried to be the adults in the crypto room.
“And it’s the reason why I’ve come here to Davos and met with finance ministers from around the world, CEOs of banks around the world, to talk about how these technologies can actually solve real-world problems and reduce costs and improve the efficiency of particularly cross-border payments, an area that here at WEF they care a lot about and population that’s paying the most for remittance costs that can least afford it.“
On April 27, during another interview with Fox Business, the Ripple CEO talked about the lawsuit brought against his firm last December by the U.S. Securities and Exchange Commission (SEC).
“It’s so important for the industry to have clarity. Innovation here in the United States in some ways is on trial. We want innovation here in the US around crypto, around blockchain, to thrive. And without that clarity, innovation goes to markets where there is clarity.
“One of the ironies is, the United States is the only country on the planet that has viewed XRP as a security. Whether it’s Japan, the UK, Switzerland, Singapore – they all view XRP as a currency. Yet here at home, where Ripple is headquartered, the US SEC has taken a different position.“
Garlinghouse also expressed his frustration over the SEC’s claim that Ripple should have known all along that XRP is a security:
“You have other parts of the US government saying that XRP is a currency. Whether it be the Department of Justice, whether it be the US Treasury, has called XRP a currency. So for the SEC eight or nine years after XRP started trading, over a trillion dollars has traded out there, for them to say, ‘we now think it’s a security…’ You should have known that all along. That seems pretty hard to swallow.“
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
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