On Tuesday, during an interview with CNBC at the Money 20/20 Europe 2018 conference, Ripple CEO, Brad Garlinghouse, said that XRP transaction were “a thousand times” faster and cheaper than BTC, explained why he is so confident that XRP will be adopted by banks for use with xRapid very soon, and called the pending class action lawsuit “outrageous.”
Sensing the widespead misconceptions surrounding Ripple, its token XRP, and its products (xCurrent, xVia, and XRapid), Garlinghouse started by explaining what XRP the cryptocurrency is used for:
“Ripple is focused on solving the exact problem you described: how do we make cross-border payments massively more efficient, for remittances, for corporates? We use a digital asset called XRP as part of that flow, and we use XRP because it’s a thousand times faster than Bitcoin in transactions and a thousand times cheaper than Bitcoin in transactions. We think the utility of XRP is such that it’s the most efficient digital asset to solve this problem. So, Ripple the company is building on top of this open source ecosystem that I call the XRP ecosystem, and Ripple is building vertically on top of that as a payments company.”
Garlinghouse was then asked to respond to recent criticisms (such as that of the host of CNBC Africa’s “Crypto Trader” show, Ran Neu-Ner) of XRP, namely that XRP the cryptocurrency has very limited value at the moment because although over 100 banks and other financial institutions have signed up to use RippleNet, no financial institution is currently using xRapid (which is the only Ripple product that needs the XRP token) in production. The Ripple CEO replied:
“Well, the first problem that Ripple focused on is engaging with those banks to solve a real world problem for them. So, we’ve been successful, as you mentioned, signing up over a hundred banks using a product we call xCurrent, and xCurrent allows two banks to settle in fiat basically in real-time. Today, that takes day, is very expensive, and has a very high error rate, as high as 6%. So that works when there are two banks that are working together that already have fiat. If we wanted to go to a third bank where we don’t have liquidity, where we don’t have a pre-funded account [a “nostro” account], that’s where a product like xRapid comes into play. xRapid uses XRP to fund real-time liquidity. So, no longer do I have to pre-fund. There’s trillions of dollars parked around the world pre-funded between banks, between corporates, corporates at banks, if we could make those trillions of dollars more efficient, we make the entire global financial system more efficient.”
This all sounds great; so is xRapid not already being used in production. Well, Garlinghouse had a good answer for that. xRapid was only released as a beta product a few months ago, and it is still in beta. In Garlinghouse’s own words:
“So, we launched xRapid… as a beta product late Q3, early Q4 last year. We announced our first pilot customers on xRapid late Q4. We announced six more in Q1. And these are big names in the remittance world, names like Western Union and Moneygram… And what we’ve found is that xRapid is saving them between 40% and 70% compared to their existing tools for managing and spreading liquidity around. So, xRapid is doing exactly what we thought. We expect to go into production with that product very very shortly, and we think as we continue to move a beta product to a production product, more and more banks, more and more other financial institutions get onboard… The point I’ve made continually, as I’ve heard skeptics spread misinformation, is if we can deliver a better product for a better price, banks and other financial institutions will get onboard.”
Finally, when questioned about the class action lawsuit filed against Ripple by U.S. investor Ryan Coffey early last month, Garlinghouse called the lawsuit “outrageous”:
“Here’s somebody who held XRP for, I think, two weeks… and is making some claims… Whether or not XRP is a security is not going to be dictated by one lawsuit… I think it’s very clear that XRP is not a security, it does exist independently of Ripple the company. If Ripple the company is shut down tomorrow the XRP ecosystem would continue to exist. It’s an independent, open-sourced technology… From an ownership point of view, owning XRP doesn’t give you any ownership of Ripple equity. And also, as we just talked about, XRP has a lot of utility, so to me it’s quite different than what a security you know looks like and I think ultimately we’ll find that conclusion.”
Featured Image Credit: “Ripple cryptocurrency physical coin” by “Marco Verch” Via Flickr; licensed under “CC BY 2.0”
