Infrastructure and Policy - A Conversation w. Brad Garlinghouse, CEO, Ripple | DC Fintech Week 2025

Well, I'm very excited for this conversation. Brad Garlinghouse, CEO of Ripple, an absolute powerhouse, I think, both in the digital asset space and and now in the Washington DC space as well.

A lot has changed in one year ago, I was on this stage and I was thinking about how much has changed even in that year and it's profound. it. I mean that that that's what happens when a new administration comes into town, particularly uh one that had such a stark difference in in crypto. Um I do want to start though as a Capitol Hill reporter uh back a little bit with with market structure. Obviously you were listening with the last panel and kind of their assessment on things.

Kind of sounds like this might be able to get done perhaps not this year. But I'm kind of curious what you've been hearing because Ripple again has become such a major player I think in politics on the hill. What is your read of the tea leaves? Well, I think one of the outcomes of having been the the the tip of the spear in the Biden administration's attack on crypto through the SEC is it kind of elevated Ripple's position even a year ago st you know sitting on this different building but stage you know the SEC at that time was appealing the loss uh and you know we were kind of continuing down this journey of the attack on crypto and so we and many others in the industry always got more active in Washington and Uh it's you know I think profound to have such a pro- crypto congress. Uh the clarity act passed the house with I think 78 by 78 dems coming over to support a Republican bill which I think is indicative of uh the desire for these technologies to be embraced.

Uh Ripple certainly will continue to be active. I don't know how to handicap the Senate what's going on in the Senate with the the Clarity Act their version of the Clarity Act on the Senate side. Uh I listened to some of the earlier panels with interest on that. Uh it's always hard to know particularly during a government shutdown like how that's going to play out. But look, I I remain optimistic.

The industry needs what Ripple has already achieved which is clarity.

And we had to get clarity through $150 million lawsuit and a federal judge, but we think the whole industry should have that same clarity. And so we've been fighting for that and we'll continue to do so. Mhm. And do you think when you talk with some of your folks on the hill, does it seem like things are truly at the the standstill that they are or is there still do you still sense that there is bipartisan momentum to get this done?

I think there's some momentum. Uh you know, I I think getting anything done in Washington these days is always a little tricky, but this is a a topic which never should have been partisan in my opinion. Like it's almost like saying one side's pro email and other side's anti- email or you know one's pro-HTTP and anti it's like these are technologies we we shouldn't uh I think think about those in a partisan way almost as Brent Macintosh said the last uh panel it's you know how are these technologies used is way more important and I I think sometimes we lose the plot and people get too caught up in you know some of the politics of it but look I'm still hopeful when you see that kind of bipartisan in support in the House. Uh and you know, certainly again, you're seeing leadership from uh Senator Alsbrook, Senator Ggo on the on the Dem side, and you're certainly seeing tons of leadership on the right. Uh I I still think there's a chance that that happens this year.

And kind of staying in the politics realm for for just a minute here. Obviously, Ripple um is part of of a large crypto group that has been playing a really key part in elections. I mean, I think last year it was $200 million spent in races across the country. Currently has a war chest of I think 141 million the last time I saw. What is the strategy for the midterms?

Fair shake.

Yes. So, well, I uh Ripple has supported fair shake from the very beginning and again I would highlight the name like the industry wants a fair shake. like this shouldn't be uh as you know polarizing and I I do think under the Gendler SEC the industry was attacked there wasn't any effort to provide clear rules of the road uh and so that what we have been asking for are those clear rules uh the I think fair shake I mean they should speak on their behalf I'm not on the you know board or you know an operator within fairshake but suffice it to say they're continuing to execute the strategy that played out under the last election which is we want to support pro- crypto candidates on the left and the right. I mean, ironically, the despite this topic being, you know, somewhat right leaning, the last uh election, fair shake supported more Dem candidates than it did our candidates. And I think that's actually a healthy thing because again, this shouldn't have ever been, in my judgment, bipartisan.

I think the Biden administration kind of made it partisan in a way that uh isn't good for the United States. If we want to be a leader in technologies that are redefining how infrastructure works around the globe, I agreed with Caitlyn Long on the last panel, like this is very global. The US leaned into that in the late 90s with the internet. We've leaned out in blockchain. Like it doesn't make sense to me.

But I think this administration obviously shifted that. Things like Fairshake are shifting that. And I think fairshake was incredibly impactful. And we have, you know, a very pro- crypto Congress and we hope hope to see the Clarity Act get get moved forward.

Absolutely. I guess I just do wonder because it does seem like on Capitol Hill obviously a lot of finger pointing, you know, a number of folks are pointing the fingers at Democrats after this draft was leaked saying this is a step too far. Are they really as pro crypto as they seem? Does that mean that you're kind of maybe less inclined to support Dems or does that mean even more support for Democratic candidates, especially those who have shown an interest in in promoting crypto?

I I really I'm not just saying this because I'm sitting in Washington on a stage in front of I'm sure reporters. I I don't think about it as are we supporting Dems Republicans. I think about we're supporting pro- crypto pro- innovation candidates who want to see these technologies as they are around the globe. I mean the United States is not leading in this and there is an opportunity for the United States to lead. So I don't think about it as you know should it lean more R or more D.

I think about it as keep leaning into procrypto candidates and educate both existing sitting congressional leaders and a next generation of congressional leaders. I mean look the reality is there is clearly a segmentation of age around all things crypto and blockchain. And I there's no doubt in my mind that over an arc of time the US will get this right. It's unfortunate that under the kind of Gendler regime, you know, it it I think we slowed things down and it made it very difficult and we pushed things offshore where ironically it's less regulated and there's fewer consumer protections which just makes no sense.

And of course when it comes to sort of the the meat of this law, what we're trying to get into is a large part of it is what is a security, what is a commodity. Of course, as you mentioned, you went through a $150 million lawsuit to get some of that clarity for Ripple, but I'm wondering, as you look at the market, I mean, are there things that should be a security? Like, how do you sort of define what Ripple's product is and why it's not a security versus other products? Is is anything a security? Well, so I think you to some degree the whole lawsuit for Ripple was about what is Ripple, which is a, you know, privately funded company that raised venture capital and issued stock associated with that.

Those are securities. What is XRP, which is a technology, an open- source technology that is kind of native to our products. We use XRP in our product stack, but there are scores of other companies building in and around the XRP ecosystem. You know, people, you know, will say things like, "Well, uh, XRP has a CEO." And I'm like, "Who is it?

Ripple has a CEO. That's me. There's scores, if not a hundred other CEOs building around the XRP ecosystem." And I I think that's a a when I hear people say that, I think, okay, they're not educated about what's going on. And so, that's we need to educate people.

Obviously, you see that in a number of other uh tokens where there's a very distributed, very open- source community. You know, people don't understand Ripple does not control XRP there. It is open source. There have been amendments passed to the XRP open source technology that we opposed. We were against them and they still passed.

That's okay. That's open source technology. There's other things we have championed that have passed, but it takes 80% of the community approving those uh amendments, which you know, Ripple doesn't have control of that. Mhm. And so I mean if you were to if you were to define kind of what's a commodity versus a security, how would you do that?

Yeah, I'm going to do everything I can to dodge that question up here.

Uh I I mean look, there is language that has been proposed. I happen to think that there's parts of the clarity act and the h that passed the house that are quite constructive towards that clarity. Uh I think some of the things that have been circulated I'm like okay I don't actually get how that well look for Ripple the one thing we will be adamant and absolute about is whatever is you know these draft comments that I see it's like well we already won a court case by a federal judge and if what you're writing gives the SEC an opportunity to bring another lawsuit against us like okay wait we can't support that we we we you you can't take us back and uh I look I I think the industry needs what Ripple has already achieved

and what Ripple has done and we've invested literally billions of dollars in the crypto industry broadly and tried to be a champion of the industry. We fought the SEC as a champion of the industry and I I think that we will continue to support it on a a multi-chain basis. Those that I think approach it as there is somehow one token to rule them all like that that's not going to be the future of crypto and blockchain. In the same way, there wasn't one browser or one search engine or one auction website or I'm thinking back to when I got involved in technology in the late 90s.

I kind of feel like there's one auction website now though. But but that that aside, um

Oh, no. Well, I don't fall in that category.

So, mergers and acquisitions, um I want to ask because Ripple has a number of examples of companies that they've acquired in the stable coin realm, in the sort of infrastructure realm. what is sort of the the plan here? What's the thought process? What's the end goal?

You know, partly because of the shift. Uh I I think people still underestimate the US as the largest economy in the world went from very strong headwinds to pretty strong tailwinds. Now, we're still figuring out as an industry what does that what do those tailwinds mean in the United States. uh and again having the chief legal officer from City Bank, you know, as an example of that shift and I think he even talked about how it was very very hard for them to engage this industry. I this has been publicly reported but I personally was debanked by City Bank during the last four years and I think you know happily we're past that stage but I I still think people underestimate the the shift in those headwinds and tailwinds and Ripple's thesis has been okay now is a time to really be aggressive about growth

uh and that is both organic growth and continuing to build we're in the the payments business leveraging uh core technologies around blockchain and the XRP ledger around payments. We're in the custody business. We're in the stable coin business. And then earlier this year, to your point around mergers and acquisitions, we spent uh 1.25 billion to by Hidden Road, a a prime broker, the frankly the largest non-bank prime broker out there.

And it, you know, we bought uh for $200 million, excuse me, a stable coin company called Rail, which was one of the leading stable coin uh companies for the enterprise. So, corporate treasury looking to use stable coins to solve some of their in their internal uh movement of money and that has been a great acquisition for us. Uh so, we we're going to continue to play offense. We I I hope I have some more news on that very very soon. Uh and we think now is the time to invest and you know that partly because of that macro shift in government policy for the United States.

Interesting. And when it comes to government policy right now, I know we touched on this a little bit the last panel that there seem to be certain agencies that are kind of giving the green light, full speed ahead, but there are groups like the Fed that are maybe a little bit more tentative and I'm wondering kind of what your experience has been so far. Do you think that things are going to change uh when we finally get uh open a few more openings on the Fed? What are your expectations? What what where are we at now?

What are your expectations for the next few years?

So, I have two thoughts about that. you know, one and as much as I have enjoyed some of the panels here today, uh, one of the things I would ask everyone to do, both reporters and otherwise, is to hold traditional finance accountable for, yes, I agree the crypto industry should be held to the same standard around AML, KYC, OFAC compliance. Yes. Yes. Yes.

And we should have the same access to infrastructure like a Fed master account. You can't say one and then combat the other. like that that's disingenuine and it's it's it it just it's hypocritical and I think uh I think we all should call them out for being anti-competitive in in that regard. So that that's kind of one thought uh just there should be a level playing field

and uh to the extent we're seeing people act in in different ways. Now the other part I would say as much as the a lot of the Fed uh managed by this administration uh the federal government not the Fed as much as uh that shift has changed I think some banks are still nervous until those changes are codified into law. The Genius Act obviously helped and that unlocks I think uh you know I had meetings yesterday in New York City where banks that would not have talked to us three years ago are now leaning in and saying how can we partner around this uh

around stable coin

around stable coins for sure and again the the delta there is the genius act has codified into law we haven't seen that happen I mean again Ripple has had the we fought the fight and we have clarity that XRP is not a security but the industry doesn't have that which I think creates challenges for some of the more conservative banking infrastructure even though they're like yeah okay we're interested but are they really leaning in because they're worried that in you know three years from now there's another election

and is there a shift I I think that's a little bit uh too cautionary because I think every day that goes by even if without the clarity act in place there's more and more you know firm policy positions that uh agencies are taking

and so you think that even though there might be some sort of regulatory shift with the next administration, whoever they are,

but you're not going to go back to where we were at with Gary Gendler.

I definitely don't think that was I frankly that was a dark day for technology in the United States

and I like I they were not acting with uh good intent and I I I could spend a whole half an hour session just on that. And I mean like you had a federal judge, this is a quote, a federal judge said about the Gendler SEC, they are not following a faithful allegiance to the law.

Yeah, that's pretty damning uh for a federal judge who happened to be appointed by a Obama that, you know, they would come out and say that about a Biden SEC. I I don't think we will go back to that. And frankly, I I think the ship has sailed. I I think that you can't put the genie back in the bottle in the United States. I don't think you really could, even though Biden may have tried with Gendler.

uh but I think now that we we are where we are you know it's it we are seeing many banks lean in but for for years the US was a frozen market right

I mean one quick data point on this 80% of Ripple's hiring between 2001 and 2004 was non US because that's where our customers were our customers around the world were leaning in the customers of the US were you know like we got to we got to be careful

and and speaking of banks I mean Ripple has applied for a national bank charter

yes

can you just sort of give a brief overview you any updates in that process? How are things going there?

Uh, I don't know the exact answer. I I mean, look, I think it depends who you talk to. It's been a little disappointing to see some of the traditional banks start to lobby against things like that. Uh, it's like, look, if we want more stability, we want uh clear regulation, having a Fed master account actually is a net plus to that. you want to derisk stable coins, having, you know, Circle have a Fed master account, have Ripple have a Fed master account, that's actually a good thing

and held to the same regulatory standards that as a bank. Great, we're in. We we feel like we're already doing that. You know, Ripple launched our stable coin under a New York trust license, which we feel like is the gold standard above what even others have done because we are all about serving institutional money movement and uh you know institutions aren't going to work with us unless we have really leaned into being compliance first. Mhm.

And I know there have been some concerns raised from community banks who say, "Look, you know, if you give uh, you know, Ripple and others a bank charter or master account, we're concerned that you're already going to see funding, trillions, I think, are projected to go from some of these smaller banks into crypto. There's a concern about a lack of capital. How do you respond to that?"

There's nothing that stops community banks from leaning into these new technologies. Also you this is kind of the classic you know people are afraid of innovation and the innovator's dilemma and uh we shouldn't penalize customers consumers based upon you know it may be a particular community bank's unwillingness to lean into new technologies that doesn't make sense to me like we should want community banks if anything it's it should be how do we uh provide clarity such that community banks can be served and leverage these technologies and compete with City Bank. Like that. That's a good thing. Right now, the community bank has to pay City Bank.

I shouldn't pick on City. I like Brent a lot actually, but uh let's say HSBC. They're not represented here. Uh you know, but the the big correspondent banks are making money from the community banks by actually being their correspondent bank to, you know, settled crossber transactions.

I'm wondering too, you know, kind of dipping back into to market structure here for a second. I mean, if the Senate doesn't get stepped on market structure, you've said that you you've already seen this increased um interest in in things like stable coin in the markets. I mean, does that kind of put a a freeze on things? If there's no regulatory clarity coming from from Congress this year, no certainty, is that going to make it that much harder uh for a lot of the digital asset space to gain traction with companies, gain traction with banks?

So, I I think you asked the question kind of a black versus white and I think about as gray. It it depends upon the bank. It depends upon, you know, what people like Paul Atkins say publicly and put out as position papers on behalf of the SEC or CFTC. Uh, and I I think it's kind of to be determined, but the more time that goes by, the better I think it is for the industry, period. Again, Ripple happens to be in a unique position and that we fought a multi-year battle to get that clarity for XRP.

And so that people are the number of people building in and around the XRP ecosystem grew quickly after that resolution was final because like oh okay this is now clear. I think the whole industry needs that. the whole industry needs to be to be able to lean in and build whether you're building payment solutions, custody solutions, land title registry solutions, uh tokenizing commercial real estate, like this this tsunami is still coming and I don't think there's anything that the US federal government is going to do to stop that. Leaning in to provide clarity so that consumers are protected, companies know how to operate. The vast vast vast majority of entrepreneurs I know in crypto want to play by the rules.

They're asking to understand what the rules are.

Sure. But is there because I hear this on the hill a lot too that if they don't provide more of this framework if they don't provide more whoever named the clarity bill was really smart because it just keeps coming up naturally. whoever provided more clarity uh then crypto will go overseas kind of as you mentioned that the US will miss the boat and that you know even if we're still having things like you know Paul Atkins coming up with stuff or the the SEC regulating on things or coming out with more clarity that that will not be enough. Well, the one thing I want to say your your comment is that already has happened, right? Lots of entrepreneurs have decided I'm not going to incorporate the United States because there's not clear rules.

I mean, people can debate about Mika, which is the the Europe's kind of uh clarity act version, and it provides guidance. Uh the you know, the FSA in the UK, like there are clearer rules coming out of other jurisdictions. And so yeah, if I was an entrepreneur starting today, I absolutely would look to that. Even the fact that you saw FTX as a non US entity, like bad things happened. Let's lean into having clarity for the United States.

Let's let's not do what Gendzo was doing of infor, you know, regulation through enforcement and bringing lawsuits and lawsuits and lawsuits. uh like why we wouldn't want this industry to have the benefit meaning the regulatory clarity, the regulatory oversight and the benefit of having a Fed master account. That's a good thing. Like I I don't know why we would fight that.

I think that might be a great spot to leave it at. I see we're out of time. So Brad Garlinghouse from Ripple, thank you so much for taking the time today. This was great. Thank you.

Thank you. Thank you.