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Ripple CEO: Don't call it cryptocurrency

Daniel Roberts

At the Yahoo Finance All Markets Summit: Crypto on Wednesday, we heard from a number of companies squarely rooted in cryptocurrency (like Blockchain, which provides digital wallets for storing your coins, or BitPesa, which helps companies in Africa make payments in bitcoin) and companies that deal in blockchain, but not bitcoin (Chain builds private blockchains for banks, JPMorgan has a blockchain platform called Quorum, but isn’t so bullish on bitcoin).

Ripple is rooted in both. The company has two blockchain products that enable faster cross-border payments and faster liquidity for banks, and one of those products uses XRP, a digital token. XRP rose in value more than any other cryptocurrency (32,000%) in 2017.

But Ripple CEO Brad Garlinghouse doesn’t consider XRP, bitcoin, or any of the other major tokens to be cryptocurrency.

“I don’t call this cryptocurrency,” he said. “It’s not currency. I can’t go to Starbucks or Amazon and use—and you know, somebody inevitably will be like, Well, I have one example where I bought something with a bitcoin.’ And then I usually say, ‘Well, did you do a second transaction?’ It’s not actually a currency. These are digital assets. If the asset solves a real problem for a real customer, then there’ll be value in the asset.”

L-R: Yahoo Finance’s Daniel Roberts and Andy Serwer interview Brad Garlinghouse, CEO of Ripple, at the Yahoo Finance All Markets Summit: Crypto on Feb. 7, 2018. (Gino DePinto/Oath)

Indeed, especially amidst the price surge at the end of 2017, people are not, for the most part, making purchases in bitcoin. Why spend it when the value is surging? Instead, they are buying and holding it as a speculative investment.

Garlinghouse’s point is that these digital assets only have value if the asset solves a business problem, not much value as day-to-day currency.

But good luck trying to get everyone to stop using the term “cryptocurrencies.” It has become the de facto moniker for this entire asset class.

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

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