Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Here with Us now Live. Ripple CEO Brad.
Speaker 3: Garling House, And of course this has been a long battle.
Speaker 3: How much certainty does this provide is the entire case over.
Speaker 4: So this provides a lot of certainty for Ripple, for
Speaker 4: Frankly me personally, because the SEC had sued me. The
Speaker 4: SEC has abandoned their appeal, and so they filed suit
Speaker 4: in December of twenty twenty. We won on the key
Speaker 4: parts of the case. In the summer of twenty three,
Speaker 4: Judge Torres made a ruling that XRP in and of
Speaker 4: itself was not a security. It's almost overbatim quote. The
Speaker 4: SEC filed an appeal about eight months ago, and what
Speaker 4: they've now agreed is.
Speaker 1: They're going to drop that appeal.
Speaker 4: We still have a cross appeal pending, and so we
Speaker 4: go from being defendant really too plaintiff.
Speaker 1: So we now are.
Speaker 4: The driver's seat to determine how we want to proceed.
Speaker 2: Are you dropping it?
Speaker 4: We're going to see it feels a lot better to
Speaker 4: be on the offense than the defense. You know, four years,
Speaker 4: we spent over one hundred and fifty million dollars defending
Speaker 4: that case. Not just for Ripple, but for the whole industry.
Speaker 4: I think it was really important that this SEC, the
Speaker 4: Gensler SEC, was really trying to bully and continued law
Speaker 4: fair filing lawsuits and lawsuits and lawsuits against crypto companies.
Speaker 4: That's over now, and I think that's great for the
Speaker 4: US crypto industry and frankly great for crypto at large.
Speaker 3: I mean, to that end, if you're looking at a
Speaker 3: new SEC, why not drop the case at this point?
Speaker 3: Why not clear the pay or why not clear the water?
Speaker 1: Well, that certainly is an option.
Speaker 4: I mean, again, it's clear the SEC has said, you
Speaker 4: know they I think in retrospect never would have brought
Speaker 4: this case.
Speaker 1: The judge did rule in certain.
Speaker 4: Instances back in twenty fifteen and twenty sixteen some XRP
Speaker 4: sales that we sold to accredited investors to institutions that
Speaker 4: those had constituted a security, and so there was a
Speaker 4: one hundred and twenty five million dollar fine that's sitting
Speaker 4: in escrow. We wouldn't mind having that back. That's on
Speaker 4: the table, and I think they're some nuances to know
Speaker 4: how this will play out. But it was important for us,
Speaker 4: for really the whole XRP community for them to know
Speaker 4: that the cases for all intense purposes, the case is over.
Speaker 1: The SEC is no longer pursuing that to that.
Speaker 3: End, to your point here, the court decision had ordered
Speaker 3: you to pay a one hundred and twenty five million
Speaker 3: dollars civil penalty for exactly what you were talking about.
Speaker 3: Is that one hundred and twenty five million paid, is
Speaker 3: what you're saying.
Speaker 2: That's still up participet.
Speaker 1: Yeah, well it's not a dispute.
Speaker 4: I mean, that's sitting in an escrow, and you know,
Speaker 4: depending upon whether we decide to continue with our appeal,
Speaker 4: we could walk away.
Speaker 1: And the whole thing and be done, done done.
Speaker 4: On the other hand, when you have a case where
Speaker 4: there were no investor, no investor harm, no investors lost.
Speaker 1: Any money, you're kind of like, wait, like why are
Speaker 1: we here?
Speaker 4: And it really goes back to Gary Gensler fighting a
Speaker 4: fight that was about power grab, that was about overreach
Speaker 4: of the bureaucracy to try to take a new industry.
Speaker 4: That what we're seeing now happening in Washington is smart
Speaker 4: legislation will come forward that happened with stable coins in
Speaker 4: real time, and I think you'll have a market Structure
Speaker 4: Bill is what it's described as to provide clarity and
Speaker 4: rules for the SEC and CF we will look at.
Speaker 2: The bigger picture.
Speaker 3: We're going to have you for a little while this morning.
Speaker 3: But do you think that part of this means fighting
Speaker 3: it till the very end to make sure even that
Speaker 3: part of uncertainty around being sold to certain investors classifies
Speaker 3: as a security.
Speaker 2: Is that what you are fighting for ultimately at this point?
Speaker 4: Well, I mean, at this point, all we're fighting for
Speaker 4: is do we want to fight to get one hundred
Speaker 4: and twenty five million dollars back?
Speaker 1: We look, I'll be honest.
Speaker 4: Would I have walked away from that before they appealed?
Speaker 4: Before President Trump put Paul Atkins and Scott Bessend and
Speaker 4: David Sachs as critical key, very smart leaders in this
Speaker 4: industry to bring this industry back on shore, I would
Speaker 4: have walked away.
Speaker 1: Now you look at that, like this case in.
Speaker 4: This SEC never would have been brought. And so where
Speaker 4: we find ourselves is great. There's a clear illegal victory
Speaker 4: to say xarp's not a security that was good for
Speaker 4: the industry, But there's pieces of it that we think
Speaker 4: could be kind of cleaned up, and there's questions, do
Speaker 4: we want to fight that fight or can we come
Speaker 4: to agreement with the SEC to drop everything the whole
Speaker 4: idea that.
Speaker 2: This wouldn't have been brought under this SEC.
Speaker 3: Have you had that specific discussion with Paul Adkins and
Speaker 3: with David Sachs.
Speaker 1: Well, Paul Adkins hasn't yet been confirmed.
Speaker 4: You know, he's a very knowledgele guy about this industry
Speaker 4: and has been for.
Speaker 1: A long time. But I've had conversations.
Speaker 4: I won't comment on specifics with certainly, you know, I
Speaker 4: think David Sachs would agree that this is a case
Speaker 4: that didn't make a lot of sense in the beginning. Again,
Speaker 4: there was no investor harm. This was about Gary Gensler
Speaker 4: waging new war against this industry.
Speaker 2: You know, it's interesting.
Speaker 3: I want to also point out that the affiliated token,
Speaker 3: of course XRP has been up roughly fourteen percent now
Speaker 3: about thirteen percent in the last twenty four hours.
Speaker 2: You know, one thing a lot of people had looked at.
Speaker 3: We're thinking a lot about how the administration is handling
Speaker 3: crypto assets, particularly outside of bitcoin. Why do you think
Speaker 3: XRP wasn't specifically named in the Executive order for the
Speaker 3: Digital asset STOCKPIP.
Speaker 4: Well, so XRP was named by the President in untruth
Speaker 4: social he posted something saying that there should be other tokens,
Speaker 4: that there's going to be a bitcoin strategic reserve and
Speaker 4: then a crypto stockpile that would include things like excesse.
Speaker 2: Later the executive order didn't include it. Why was that.
Speaker 4: I don't know what specifically is in the executive order.
Speaker 4: My understanding is there's going to be a bitcoin strategic reserve,
Speaker 4: there'll be a crypto stockpile representing other cryptos, and I
Speaker 4: would expect that will include XRP. Look, at the end
Speaker 4: of the day, I think the stark contrast is in
Speaker 4: the Biden administration, we couldn't get a meeting with people
Speaker 4: at the White House. Now we're welcomed into the White House,
Speaker 4: and that's just a massive change. I think we want
Speaker 4: this industry to thrive in the United States. We don't
Speaker 4: want to push it offshore where you have fewer regulations.
Speaker 3: I think the reason they keep pushing you too is
Speaker 3: because I think now it's widely accepted that this is
Speaker 3: a pro crypto administration, but the details, that is what's
Speaker 3: causing an overhand The uncertainty of the details, so to
Speaker 3: the extent you have confidence right about XRP being in
Speaker 3: that stockpile or otherwise getting more support for an ETF
Speaker 3: for example, Where does that confidence come from and what
Speaker 3: kind of timeline do you see.
Speaker 2: It happening A on?
Speaker 1: So I have immense confidence on the ETF.
Speaker 4: I think there's eleven different filings pending with the SEC
Speaker 4: to launch ETFs from everybody from bitwise to Franklin Templeton
Speaker 4: and a whole bunch of people in between. I think
Speaker 4: those will be live in the second half of this year.
Speaker 4: We have seen even outside the United States, you have
Speaker 4: live ETPs, and at a time when a lot of
Speaker 4: outflows are exiting, some of the crypto ETFs are seeing
Speaker 4: inflows into XRP. And I think that's because you had
Speaker 4: this false negative pressure from the SEC. This is kind of,
Speaker 4: you know, a exognous hand holding things down that's now
Speaker 4: being released.
Speaker 1: And that's great for the market.
Speaker 4: It's great for builders within the XRP ecosystem globally.
Speaker 2: One more on the stock pam, Yeah, how much XRP
Speaker 2: would be in it? Where does it come from?
Speaker 4: Well, my understanding what I read about the I mean,
Speaker 4: I think there are some questions and that the devil.
Speaker 4: Maybe in the details as Treasury implements some.
Speaker 2: Of this absolutely details, but.
Speaker 4: My understanding is that the stockpile wi be represented by
Speaker 4: seized other cryptos other than Bitcoin, that then we'll be
Speaker 4: in that stockpile.
Speaker 1: So to the extent that.
Speaker 4: Various law enforcement agencies have seized cryptos which would include XRP,
Speaker 4: that those would go into the stockpile in addition to
Speaker 4: the Bitcoin Strategic Reserve.
Speaker 3: That's my understanding, Riple CEO Brad garling House. And of
Speaker 3: course we have been talking here about a big moment
Speaker 3: for you and for your company, of course, a rollback
Speaker 3: really of the tensions that had been brewing.
Speaker 2: With the SEC. And let's talk about the next phase.
Speaker 3: One thing I'm really wondering about now that there's more
Speaker 3: clarity for you, is that is an IPO, frankly in
Speaker 3: your future. Now we talk so much about the potential
Speaker 3: for the XRP token to be wrapped in an ETF
Speaker 3: that is a method of listing.
Speaker 2: So is listing possible now for you for Ripple, well.
Speaker 1: Certainly something that is possible.
Speaker 4: The United States SEC under Gensler was so hostile to
Speaker 4: this industry, I mean, ironically they approved the s one
Speaker 4: from coinbase and then sued them for doing the things
Speaker 4: they said they were doing.
Speaker 1: So this sec fortunately is going.
Speaker 4: To be I think very constructive and positive for this industry.
Speaker 1: So I think that's available.
Speaker 4: I think the companies at a stage where we could
Speaker 4: consider that. That being said, it isn't a huge priority,
Speaker 4: you know, I think most companies are going public raising
Speaker 4: capital is something that is high.
Speaker 1: On their radar.
Speaker 4: You know, we have been in a very fortunate position
Speaker 4: to be able to grow the business organically. We're also
Speaker 4: frankly more proactive and looking at acquisitions. That this is
Speaker 4: an industry that finally is going to be able to
Speaker 4: thrive in the United States, the largest economy in the world.
Speaker 4: And I think the industry is still underestimating the shift
Speaker 4: from the headwinds to the tailwinds. That's going to make
Speaker 4: a bigger difference that people think. And finally, the US
Speaker 4: market is really unlocked.
Speaker 3: So it sounds like what you're saying, acquisitions are almost
Speaker 3: more of a priority now than an IPO for you.
Speaker 3: So then what would you be looking for to buy
Speaker 3: and how big are you willing to go?
Speaker 4: Well, I'm not going to name names, but look Ripple
Speaker 4: at its core is a blockchain infrastructure company. We sell
Speaker 4: our technologies to business, primarily financial institutions, and we'll look
Speaker 4: at other things that are blockchain infrastructure companies. I think
Speaker 4: there will be consolidation this year. There's a lot of
Speaker 4: excitement about some of the changes, and you know we
Speaker 4: will lean into that for sure.
Speaker 3: So when you think about what's possible in terms of
Speaker 3: financial institutions, there's been a lot of conversation about loosening
Speaker 3: of regulations and red tape when it comes to the
Speaker 3: financial industry and its interactions with the crypto community. What
Speaker 3: are you actually seeing have and our bank's really warming
Speaker 3: up in a way that's significant right now?
Speaker 1: I mean I think unequivocally yes.
Speaker 4: I mean, just in the last few weeks, I have
Speaker 4: seen US financial institutions go from being like, look, we're
Speaker 4: just not going to touch it because we don't want
Speaker 4: the extra scrutiny of the regulators, which again may or
Speaker 4: may not have even been legal, given these are legal businesses.
Speaker 4: But you have large banks who used to say negative
Speaker 4: things now saying positive things. I think that the two
Speaker 4: areas you'll see the most activity in the short term.
Speaker 4: One is around custody. These are banks that want to
Speaker 4: be able to custody, particularly when you see real world
Speaker 4: assets being tokenized.
Speaker 1: You need to be able to safely.
Speaker 4: Manage and custody that for customers and potentially for the bank.
Speaker 1: And the second is around payments.
Speaker 4: I mean, the global payments infrastructure still remains very dated.
Speaker 1: Wires are slow.
Speaker 4: I just had a wire that was sending over Euro's
Speaker 4: disappear for five days.
Speaker 1: You know, that's surprising a world of the Internet.
Speaker 3: So one part of that payment's infrastructure that I'm watching
Speaker 3: really closely is, of course stable coins. There is starting
Speaker 3: to be more clarity in Washington, and you're seeing people
Speaker 3: starting to use stable coins in really interesting ways. I
Speaker 3: think about Robinhood, for example, using stable coin in terms
Speaker 3: of facilitating twenty four hour trading.
Speaker 2: What's next?
Speaker 3: I mean, if you think about the next forefront of
Speaker 3: stable coins, now that the US is getting toward clarity,
Speaker 3: what's possible.
Speaker 4: Well, again, I think we're underestimated how big that might get.
Speaker 4: You know, today that market's about two hundred and thirty
Speaker 4: billion dollars, so I think some smart people think that
Speaker 4: may go up ten.
Speaker 1: X in the next five years. I think that's probably right.
Speaker 4: I mean, the two leading players and tether as well
Speaker 4: as USDC are both I think poised to do well
Speaker 4: in that market. Ripple launched our own stable coin at
Speaker 4: the end of last year. That's already ahead of our
Speaker 4: own internal forecasts in terms of where we are at
Speaker 4: this point in the year. It's still we're small, but
Speaker 4: the goal is by the end of the year for
Speaker 4: r l USD Ripple stable coin to be one of
Speaker 4: the top five in the market by the end of
Speaker 4: the year.
Speaker 1: And I think the whole market's going to grow dramatically
Speaker 1: of this year.
Speaker 2: So what does it take you to get there? Who
Speaker 2: are you pairing up with?
Speaker 3: Are you creating some financial partnerships in order to make
Speaker 3: our l usc more of a household name.
Speaker 1: Yeah, for sure.
Speaker 4: I mean even today we had more listings go live
Speaker 4: for our l USD on some global crypto exchanges.
Speaker 1: You know, anytime you do something new, it takes.
Speaker 4: A minute for that kind of if the pun of
Speaker 4: the Ripple effect of seeing how that plays out, and
Speaker 4: so we're seeing that happen in real time.
Speaker 1: So I'm really pleased.
Speaker 4: Again, as I said, we're ahead of our Q one
Speaker 4: forecasts of where we expect it to be, So we
Speaker 4: feel really good about that progress.
Speaker 2: Given through what you have gone through with the SEC.
Speaker 3: I think one major question is how tokens list in
Speaker 3: the future, What do they mean?
Speaker 2: How are they classified?
Speaker 3: Now that you're talking about many other say even private
Speaker 3: equity companies looking to tokenize their funds. Venture capitalist Kathy
Speaker 3: Wood told us yesterday she's considering that.
Speaker 2: For her own fund. What does this mean? What are
Speaker 2: the rules of the road.
Speaker 3: Are people going to list and put the cart in
Speaker 3: front of the horse as they do?
Speaker 2: So?
Speaker 4: Yeah, well, look, I think tokenizing, like what Kathy Wood's
Speaker 4: talking about, democratizing access to do different investment vehicles in
Speaker 4: different investment types is very compelling. Even you imagine shark
Speaker 4: tank enabling the participation by different sharks, Like, there's some
Speaker 4: really interesting stuff you could do. Right now, Congress, it seems,
Speaker 4: is more focused on getting stable coin legislation passed. That
Speaker 4: went for markup last week, and I think you'll see
Speaker 4: that potentially in front.
Speaker 1: Of the President in weeks.
Speaker 4: The other piece of legislation I think we'll move quickly
Speaker 4: after that is kind of the market Structure bill last summer.
Speaker 4: If something called Fit twenty one past the House did
Speaker 4: not get through the Senate, I think that a market
Speaker 4: structure bill like FIT twenty one will come before Congress,
Speaker 4: hopefully before the summer recess.
Speaker 1: We'll see that pass.
Speaker 3: Also, you know, when you think about how many exchanges
Speaker 3: are now looking to loosen their listing standards, already on
Speaker 3: the heels of lighter oversight and the cart before the
Speaker 3: horse question.
Speaker 2: Do you think that people are getting a little ahead
Speaker 2: of themselves and listing things that shouldn't be listed.
Speaker 4: Well, I don't think about it as lighter regulation, because, frankly,
Speaker 4: I think the industry wants to be regulated. And what
Speaker 4: we've been saying for years as an industry is we
Speaker 4: just want clear regulation.
Speaker 1: We don't want lawsuits.
Speaker 4: Just claiming one thing and the next week contradicting themselves,
Speaker 4: which is exactly what Gensler's SEC was doing. So I
Speaker 4: think just the fact that we have an SEC who's
Speaker 4: trying to work constructively instead of trying to sue more companies.
Speaker 4: Let's actually work and let's codify and get legislation to
Speaker 4: provide that clarity.
Speaker 3: Again, if you don't have that clarity, what you saw
Speaker 3: years ago was an ICO boom where tons of things
Speaker 3: that were raising money never worked out for the people
Speaker 3: that were buying the tokens or points.
Speaker 4: Look, I agreed, I said then that I think of it.
Speaker 4: Some of these icos were a lot more like IPOs.
Speaker 4: They were securities. The problem is the sec then kind
Speaker 4: of used that to just blanket and say, I mean, well,
Speaker 4: Gensler said, before he was SEC chair, he didn't think
Speaker 4: there are securities, and then after he became SEC chair,
Speaker 4: as kind of his power grab, Gensler wanted everything under
Speaker 4: his jurisdiction.
Speaker 1: So I think I was that ICO boom.
Speaker 4: Went away, and there's lots of ways this government can
Speaker 4: regulate and manage fraud and manage criminal.
Speaker 1: Activity, and that did happen. People did go to jail.
Speaker 3: I have one more question for you about ripple on XRP,
Speaker 3: in particular on the supply and how it's managed and
Speaker 3: the unlocks. Is there anything you would do to change
Speaker 3: the amount of supply brought to market?
Speaker 2: Can you do that? How does that exactly work?
Speaker 3: Because there is a level of dilution for XRP when
Speaker 3: more supply is in on a regular basis.
Speaker 4: So this is one of the things I'm glad you
Speaker 4: ASKEDECT because there's frankly misinformation. Sometimes frank disinformation people spreading
Speaker 4: falsehoods out there. The amount of XRP that was created
Speaker 4: in twenty twelve when it was first started that blockchain
Speaker 4: has first started was one hundred billion units.
Speaker 1: That can't be increased. It's slightly deflationary. Now there's about
Speaker 1: ninety nine point nine billion units.
Speaker 4: Ripple owns about forty two percent of that supply.
Speaker 1: We have had in for I guess eight years.
Speaker 4: We published something called the XRP Markets Report, where we
Speaker 4: share how much we are introducing into the market because
Speaker 4: we want that to be predictable, and that has been
Speaker 4: the case for many years now, and so we will
Speaker 4: continue to make sure that's very predictable. You know, at
Speaker 4: some point maybe we won't be selling as much. We'll
Speaker 4: see how that plays out in the future. But right now, frankly,
Speaker 4: we get criticized for owning too much, and then we're
Speaker 4: criticized for selling some. But we want to do that
Speaker 4: in a constructive way, which is what we've done for years.
Speaker 2: We'll be keeping a close eye on those moves. Brad,
Speaker 2: thank you for joining us here.
Speaker 3: On said, I know that it's a big announcement and
Speaker 3: for Ripple, and of course a lot of still changes
Speaker 3: still ahead. That is of course, Ripple CEO Brad Garling House,