A conversation with Brad Garlinghouse, CEO of Ripple, about the momentum, focus, and future of Ripple and XRP as their annual conference, Swell, kicks off.

Ripple has surpassed 300 customers, they reported in a press release today, just in time for their third annual Swell conference. During Swell 2018, Ripple announced On-Demand Liquidity (ODL, formerly known as xRapid), leveraging XRP to eliminate pre-funding in cross-border payments. In less than a year, two dozen customers are signed up to use the product, with some of them already being live.

I had the opportunity to speak with Brad Garlinghouse, who was ready to celebrate both the launch of the new Ripple Singapore office and kicking off their big customer event.

“There has been a lot of skepticism about how XRP can be used for liquidity, and as the industry continues to try to find use cases around blockchain, we have more than 20 customers using XRP for cross-border liquidity and are benefiting from that”, he said, leading into sharing with great enthusiasm that while ODL was initially launched with corridors into Mexico and the Philippines, they are now also live in Australia, with Brazil soon to follow.

“… we have more than 20 customers using XRP for cross-border liquidity …”

MoneyGram, one of the world’s largest money transfer companies, went live with ODL just two months after the announcement in June. Based on the initial success in Mexico, they have since expanded into the Philippines. According to Brad, they are now expanding into new corridors alongside Ripple.

“As we kick off the conference, we’re really pleased with all the momentum. There are strong network effects: the more customers you have on the network, the more value in joining the network. And we certainly expect to continue to see that momentum build as we bring all of our customers together and they get introduced to each other. We expect more corridors to go live and continue to fuel that volume growth.”

On-Demand Liquidity

For ODL to be successful, healthy digital asset exchanges are needed around the world, and only a few weeks ago, Ripple invested in Bitso, the largest digital asset exchange in Mexico, with plans to expand into more corridors in Latin America. Brad comments that Ripple “wants to see companies like Bitso be very successful. This is one kind of public example of the kind of investments we want to make into digital asset exchanges to make sure they’re healthy, robust, and we will continue to look at opportunities like that.”.

In the press release, Ripple highlights goLance, Viamericas, FlashFX, and Interbank Peru. Brad mentions FlashFX being one of the key partners in opening up the ODL corridor for Australia but also highlights goLance, a platform for freelancers: “A lot of their freelancers are based in the Philippines, and the average transaction size ends up being less than $100. It’s pretty transformative for goLance’s business. It makes joining the goLance’s network more compelling, and they get more freelancers joining.”

When asked more about the momentum and interest from existing customers to use ODL, Brad shed light on the kind of questions they receive:

“I’m a correspondent bank. I’ve got customers around the world, and I want to serve the Philippines. And I don’t have a correspondent banking relationship there. And we can say to them, look, one path is that you can sign up a correspondent banking relationship and you pre-fund, and you have that quarterly overhead of compliance requirements and all the things that go with that regulatory point of view. Or you can shoot off payments in real-time.”

“… it is not only going to be about fast-growing payment providers like Viamericas. I think we absolutely will see larger financial institutions, who see the benefit of not pre-funding and using that working capital for other purposes.”

This was followed by another story about one of the largest banks in Canada that was exiting its correspondent banking relationship in Brazil:

“The reason they’re exiting is because of the costs and the overhead of continuing the service. That day the bank felt like, ‘look, it’s not worth it. We can use some other correspondent and add a hop’. Now, adding a hop adds time, and that’s cost. But they said to us, look, if you can allow us to be in Brazil without being in Brazil, that’s great for our customers. It is an example of; it is not only going to be about fast-growing payment providers like Viamericas. I think we absolutely will see larger financial institutions, who see the benefit of not pre-funding and using that working capital for other purposes.”

The XRP Community

In a change from previous years’ Swell conferences, Ripple sent out invites to members of the XRP community, such as bloggers, YouTubers, and social media personas. It created confusion amongst some XRP investors on social media who questioned how it benefits Ripple to host both customers and XRP enthusiasts at the same event, as well as generating rumors and hype about potential announcements.

“Well, I mean, I’m afraid I’m gonna rain on your parade. It’s not quite that exciting. There are a lot of enthusiasts around XRP following Ripple, and they are advocates for sure, and extremely thirsty for knowledge and awareness of what’s going on around XRP. So we have 6-700 people, including customers coming over the course of the next couple of days, and so it felt like allowing them to hear firsthand some of those things felt appropriate.”, Brad said, continuing with a comment on hype: “We have tried really hard to make sure that our reality is ahead of our hype. We would rather under-promise and over-deliver, and I think what one of the challenges in the crypto ecosystem right now is people hyping and making up a lot of promises about what smart contracts or prediction platforms can do. Look, I think there’s a lot of interesting ideas, but for this industry to be successful, we can’t be focused on hype – we have to be focused on reality.”

“… we even have companies who at one point built on a different blockchain looking to migrate to the XRP ledger because it’s more efficient.”

For Brad, the tension between serving financial institutions and having a crowd of XRP investors weighing every word said or written doesn’t seem to be a conflict. Shifting the focus to how the community around XRP is benefiting the XRP ecosystem, he said:

“There are a bunch of interesting companies doing interesting things in and around the XRP ecosystem. Ripple is one significant player in that space. But I’ve been excited to see a number of other projects building on the XRP ledger … XRP is extremely efficient, particularly for payments, and that’s why Ripple is using it for that purpose. Coil is using it for that purpose. Forte is using it for in-game payments. And I think you will continue to see more companies use XRP. And we even have companies who at one point built on a different blockchain looking to migrate to the XRP ledger because it’s more efficient.”

Reasserting the importance of the industry focusing on reality and not hype, he stated, “We’ve got two dozen customers with millions of dollars of flows per week. This is no longer a science experiment by any stretch.”

Xpring

We have seen Xpring develop from a venture capital branch with investments in companies building on the XRP ledger, to what is now the Xpring Platform, a developer platform for the XRP ledger itself, Interledger Protocol (ILP), and web monetization. This is a shift that brought acquisitions of both companies directly related to XRP and ILP, as well as some that could seem a bit off target. Commenting on changes in Xpring, Brad said:

“When we first kicked off Xpring, it was much more focused on making investments. That will continue to be part of the journey. But we also realize there is an opportunity to improve some of the infrastructure and the tools, really thinking about the XRP ledger as a developer platform in the same manner that RedHat thinks about Linux as a developer platform. And RedHat is investing in building tools for Linux as an example.”

“… Amazon’s first go to market was books and Ripple’s first go to market is cross-border payments.”

Speaking more directly into some of the most recently announced acquisitions, Logos Network, Strata Labs, and Algrim, Brad adds that “to some degree, these are each teams joining to support from an engineering point of view. Algrim will be working more specifically around RippleNet. So Logos and Strata are really dedicated to what we’re doing with Xpring and Algrim will be working with RippleNet, in particular on On-Demand Liquidity, given their experience working with developing software for markets.”

Some call Ripple out as the “Google of fintech,” but Brad would instead compare Ripple to Amazon, saying that “where Amazon’s first go to market was books and Ripple’s first go to market is cross-border payments. We will go after other vertical segments, and we hope to have more to share on that in 2020.”.

Final Comments

Having compared the pace of progress to the natural progression of “crawl, walk, run,” Brad says Ripple is now walking, but not yet running. Seeing the whole journey as a marathon, Brad commented that, “I think the people who are focused on the hype is trying to sprint – Ripple is very much focused on the marathon. And I think we are at mile marker two of the 26 miles. We have 24 miles ahead of us.”.

“… this is real and it’s happening.”

Exciting days are ahead at Swell 2019 in Singapore, and what is Brad Garlinghouse looking forward to the most? Talking and listening to customers who are using their technologies and benefiting from it:

“To me, it’s when it becomes tangible, and I think for us to be able to highlight specific customers here, specifically how they’re using our technologies and how it’s benefiting their customers, how it’s helping them grow their business. That’s where it feels very real to me. Even being here in Singapore, where there’s a lot of migrant communities and remittance flows and communities that are underbanked, in some cases unbanked, and seeing how these technologies benefit those segments. I think it’s real. It’s not hype. Right? It’s not an idea that we’re seeking regulatory approval on. It’s like this is real and it’s happening. So anytime it feels real, as when I enjoy it the most.”

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