Brad Garlinghouse, the CEO of Ripple recently appeared on the Stanford Legal podcast to speak about Ripple, XRP and the blockchain.
Garlinghouse began the session by speaking about the difference between Ripple and XRP, clearly mentioning that XRP was an open-source, decentralized technology. He also mentioned that some of the creators of the Ledger worked on Bitcoin [BTC] before they did on XRP. He stated:
“They saw some of the scalability problems the Bitcoin is likely to have, from a energy consumption cost. They wanted to build a better digital asset to solve some of these problems.”
He also clarified on his use of the term digital assets, stating that it was a “pragmatic human distinction”. He gave his reasons for doing as he thought that the average population is not going to buy “coffee at Starbucks with Bitcoin or XRP any time soon”. He stated:
“I think we have got to ask ourselves what problem is that solving. I think in some ways the fiat currency, the US Dollar in this case, works pretty well. We need to make sure it’s better than that before we talk about it as a currency.”
When asked about the places where these digital assets could be used to transfer value, Garlinghouse spoke about Ripple and their offerings to solve cross-border payments problems. He stated:
“Ripple is using digital assets to solve a cross-border payments problem. If you’re sending money across oceans across networks it ends up being really slow and really expensive.”
He provided the example of the fastest way of transferring money is physically delivering cash, with alternatives such as wire transfers being costly and time-consuming. He even brought up a recent conversation he had with an employee of the World Bank, who stated that the average remittance cost in countries apart from those in the G20 was 600 basis points, or around 6%.
On Ripple’s technologies, he explained Ripple Net and its ability to conduct cross-border payments in “effectively real-time” at inexpensive rates. Moreover, Garlinghouse spoke about the current state of settlements cross-border, where he spoke about the various “hops” the money goes through during a bank transfer. He stated:
“We had one of the largest banks in Australia, the CEO told me that 40% of all of their consumer wire transfers result in a customer service phone call. The frustrating thing for the bank is not only do they have to absorb the cost of taking a customer service phone call, they also deliver the news that they don’t know wait a couple more days it’ll probably be there.”
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