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Ripple CEO Brad Garlinghouse: 'There's a lot of FUD about XRP'

Daniel Roberts

The price of the digital token XRP rose 32,000% in 2017. You read that correctly: thirty-two thousand percent.

It was a staggering surge, and it happened despite the fact that many people buying up XRP don’t know anything about the company behind it, Ripple. (And in the month of January 2018, XRP dropped by 60%.) Ripple, the company, owns 60% of the supply of the token XRP, which leads crypto enthusiasts to criticize XRP for not being truly decentralized, the way that bitcoin and other leading digital tokens are decentralized.

All of this has made XRP extremely controversial. At the Yahoo Finance All Markets Summit: Crypto on Feb. 7, Ripple CEO Brad Garlinghouse addressed the controversy.

“There’s a lot of FUD around all digital assets,” Garlinghouse said. “That’s true of XRP and that’s true of bitcoin, for sure.”

FUD stands for “fear, uncertainty, and doubt.” When news outlets run negative headlines about crypto, big bitcoin believers often accuse the media of intentionally spreading FUD.

“I actually am long bitcoin, personally,” Garlinghouse said. “I am not a believer that bitcoin dies some terrible death. I don’t think it’s going to solve a payments problem. XRP is 1,000 times faster and 1,000 times cheaper than a bitcoin transaction.”

Ripple, the company, sells two payment products to banks. There’s xCurrent, which is software for settling cross-border payments with other banks. Garlinghouse describes it as “enabling real-time messaging, real-time settlement between banks.” More than 100 banking clients have signed on to use xCurrent, Garlinghouse says. The xCurrent platform does not use cryptocurrency.

And then there’s xRapid, which minimizes liquidity costs for banks doing business in emerging markets, where they typically need to have pre-funded accounts in the local currency. Garlinghouse explains xRapid this way: “The Bank of Andy can sell $1, buy XRP. That XRP can then be moved to an Argentinian digital asset exchange, you can sell the XRP and buy an Argentinian peso, and now you have good liquid funds in less than 10 seconds in another market.”

Only xRapid uses the cryptocurrency XRP. Four banking customers are currently testing xRapid: MoneyGram, Mercury FX, IDT, and Cuallix.

Ripple CEO Brad Garlinghouse at the Yahoo Finance All Markets Summit: Crypto on Feb. 7, 2018. (Gino DePinto/Oath)

Garlinghouse even acknowledged, about xRapid, “I talk to senior banks, people who are close to the company Ripple, they’re invested in us. And they’re like, ‘Hey look, we love what you’re doing around xCurrent… not sure yet about xRapid.’ That’s fine. The xRapid product gives you a faster product at a lower price. Do we really not think that people are going to say, ‘Huh, that’s kind of interesting’?”

Considering that XRP is widely referred to simply as “the token of Ripple,” when in fact it’s only the token for Ripple’s less-widespread product, you can see why some believe it’s alarming that the value of XRP spiked so greatly at the end of 2017.

When asked about that spike, Garlinghouse said, “I’ll tell you the exact same thing I tell people inside the company: The price of XRP over three hours, over three days, over three weeks, or even three months, that is not success. That’s not how I measure success. I think about success over the next three to five years.”

But later in the discussion, Garlinghouse clarified that he wasn’t saying the price of XRP doesn’t matter to him. It matters a great deal—in the long term.

“I try not to check the price of XRP multiple times a day. Sure, I probably check it once a day,” he said. “I will again point out: Ripple, the company, as the owner of 61% of the tokens today, is the most interested party in the success of the XRP ecosystem. And we will do things to invest in the success of the XRP ecosystem because that’s in our best interest.”

Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.

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