Ripple CEO Brad Garlinghouse recently appeared on CNBC’s Squawk Box to discuss Facebook’s proposed digital currency, Libra.
Garlinghouse said the intense attention Libra has generated could ultimately benefit the future of finance, despite the harsh rhetoric and widespread criticism directed at Facebook:
On a macro level, I think it was good for the world because it focused a lot of attention on a set of technologies that could genuinely benefit people who currently don’t fully gain from mainstream banking and consumer banking experiences. There may have been a bit of arrogance—perhaps Silicon Valley arrogance—in how Facebook approached this, launching things before thoroughly addressing certain issues.
He agreed with U.S. Treasury Secretary Steven Mnuchin’s warning about new digital assets like Libra and the risks posed by unregulated currencies:
For these technologies to be used well, they need to be implemented in a regulatory and compliant way. We cannot increase risks—whether that’s terrorism financing or money laundering. These are areas Ripple has prioritized from the outset, ensuring we work with the existing system.
When asked what he meant by “Silicon Valley arrogance,” Garlinghouse replied:
I think the dialogue with regulators about Facebook began some time ago, and they heard many of these concerns loud and clear. I don’t think Facebook took the time to address many of those concerns before launching.
Garlinghouse also pointed out that the Facebook Libra Association, the consortium intended to oversee the project, did not include banks as partners. By failing to involve the existing banking system, Facebook effectively positioned itself against that system:
There’s a big opportunity to change how the world’s financial systems operate, which could be very beneficial for consumers, businesses, and so on. But it shouldn’t be framed as competition with banks. […] When David Marcus said this would be “the end of Western Union,” that sent a huge signal to the banking world, which had been watching big tech move into this space.
Only days earlier, Garlinghouse had responded to Treasury Secretary Mnuchin’s remarks on Twitter after Mnuchin expressed concerns and criticisms of cryptocurrencies. In a series of tweets, Garlinghouse said he agreed with Mnuchin that cryptocurrencies will not replace fiat currencies in his lifetime. He also stressed that not all cryptocurrencies should be lumped together.
Just watched @stevenmnuchin1’s press conference on regulating crypto and have personally spoken to him on this topic. I’ve also been ruminating on @realdonaldtrump’s tweets on crypto last week. (1/7)
— Brad Garlinghouse (@bgarlinghouse) July 15, 2019
But as Mnuchin indicated, the entire crypto industry should not be painted with one broad brush – it has come a long way since the days of Silk Road. For the industry to succeed, we need to work with regulators and within policies. Full stop. (3/7)
— Brad Garlinghouse (@bgarlinghouse) July 15, 2019
Garlinghouse emphasized that Ripple is different from many other players in the space. Cross-border payments are the area where Ripple and XRP currently lead, and he said the company and the industry can succeed if they collaborate with regulators and policymakers.
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