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August 02, 2023

A Crypto-Enabled Future starts with Infrastructure

The conclusion to one of interesting sessions from REDeFiNE TOMORROW 2023 featured an in-depth discussion between Brad Garlinghouse, CEO of Ripple and Mukaya (Tai) Panich , CEO & CIO of SCB 10X, about "Crypto-Enabled Future Starts with Infrastructure." They discussed Ripple's goals, the significance of the infrastructure for the next generation of cryptocurrencies, and the recent progress in taking over the Swiss-based crypto asset management firm.

Garlinghouse started with Ripple's mission of utilizing blockchain technology to address current financial system issues, particularly those involving international transactions. The fact that 95% of Ripple's customers are located outside of the US, which signals significant growth outside the US.

Ripple not only focuses on cross-border financial institutions and payments, but also includes liquidity asset custody and the conversion of various assets into tokenization, as well as having a strong interest in central bank digital currency (CBDC). 


Stable infrastructure is a key factor in determining the future of cryptocurrencies

Garlinghouse emphasizes the significance of having a reliable infrastructure for the use of cryptocurrencies in the future. The essential components that need to be integrated for effectively managing the current financial system and preventing potential basic problems are liquidity, asset custodianship, and regulatory compliance.

For example, Ripple's initial focus was on utilizing and resolving customer issues. Galinghouse highlighted that to ensure that the crypto industry grows in a way that is sustainable in the future, we must be certain that we are able to effectively address the issues that arise.

Ripple acquired the crypto management firm in Switzerland.

The Swiss-based cryptocurrency management company, Metaco, has been acquired by Ripple. With more major players entering the market, this strategic move is expected to be even more beneficial. Additionally, it is believed that traditional assets will increasingly be created online, necessitating stable asset custody. Many financial institutions are now looking for this solution. Since both Ripple and Metaco have a history of working with financial institutions, they are well-known and have an extensive list of clients. As a result, they have an advantage in problem-solving and can demonstrate that they truly serve the clients.

“RippleNet,” A Compelling Cross-Border Payment Solution

Another of Ripple's key services is RippleNet, a cross-border payment solution. About 50% of RippleNet's transaction volume is carried out through the On-Demand Liquidity (ODL) service, a cross-border payment method that uses the XRP coin as a bridge to let users easily buy or conduct transactions that were popular a few years ago. He also noted that this service is expanding outside of the US. RippleNet is the first service provider for organizations that actually serve the purpose of usage while building credibility.

Even though the SEC is pursuing legal action regarding the XRP situation, this does not prevent the growth of Ripple, especially the ODL service. The fact that other countries’ jurisdictions are more aware of the XRP's situation allows Ripple to keep extending its global reach.

Opinions on the application of CBDC and Stablecoins in cross-border payments.

According to Garlinghouse, Stablecoin is a digital token that binds assets to just one currency, typically Fiat. The good news is that it can reinforce and speed up what Ripple has set in place to achieve its goal. The main advantage of using XRP for cross-border transactions is its ability to serve as a bridge for providing liquidity advantage and lowering fluctuation risk due to its little transaction times.

Garlinghouse claimed that Ripple had introduced the CBDC platform, which is an end-to-end solution for the central bank to introduce token money. It seeks to cooperate with numerous central banks all over the world.

The CBDC platform not only launches new currencies but also introduces tokens for real estate and other assets. Garlinghouse continues to insist that Stablecoins and CBDC are better complements to Ripple's services than its rivals.

Another important aspect is that he also mentioned that improving regulation clarity helps in the development of cross-border payments on blockchain and the cryptocurrency industry because there is still confusion in the law and concern about technology applications at the moment. It has been demonstrated that these technologies have greater potential, flexibility, and effectiveness than traditional systems.

According to his prior work experience, he discovered that a significant growth inhibitor is the absence of clear legal standards. However, a lot of nations, including Thailand, have been making progress in this field.

How will Ripple be impacted by legal action taken by the SEC?

Garlinghouse stated that the SEC's prosecutions, which have been ongoing since 2020, have been an attack on the entire crypto industry, not just Ripple. He predicts confidently that the court will rule shortly and that actual transparency may then start to show. Ripple has primarily expanded outside of the US due to the unpredictability of US law. For example, it has expanded its office in Dubai to serve as the region's hub. In many nations, including the UK, the UAE, the EU, Japan, and Singapore, there is also credit for the clarity of the law. This enables many companies to comprehend how to behave legally or what licenses should be used in the same way as the governmental sector and supervisory authorities.

Recommendations for those considering starting a cryptocurrency business.

Garlinghouse advised being patient and making wise bets based on his extensive experience in the crypto industry. There are plenty of opportunities out there for you if you do not rush things and take your time before deciding as he was convinced that these technologies would survive. Ripple, for example, places a high value on "infrastructure" and has a deep understanding of its users' issues.

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