Central banks review the XRP Ledger for issuing stablecoins

• Ripple could have acquired more customers for its XRP-based payment solution, On-Demand Liquidity (ODL), in 2020 if there had been more regulatory certainty.
• Central banks are looking into XRP Ledger as an open source technology for issuing stablecoins.

In a new episode of “The Scoop” podcast, Frank Chaparro spoke to Ripple CEO Brad Garlinghouse about the company’s success this year, as well as topics like regulatory uncertainty in the United States, why Ripple isn’t planning a initial public offering (IPO) right now and how central banks are investigating the XRP Ledger. As for the year 2020, Garlinghouse said that in a year that proved challenging, Ripple exceeded its expectations for 2020.

“We will not grow as fast this year as we thought. However, we are still getting two production financial contracts a week, “Ripple CEO said. Garlinghouse also pointed out that XRP’s transaction volume has grown strongly, outpacing Bitcoin (BTC) liquidity for example in a few days. some exchanges, such as Bitso, however, an opaque regulatory environment prevented Ripple from reaching its full potential.

According to Garlinghouse, there is no “level playing field” for all cryptocurrencies in this regulatory climate. “Bitcoin was the only one with the pass hall”. Because of this, cryptocurrencies, such as XRP, which have to live without clarity, have performed worse, according to Garlinghouse:

They will choose a platform where there is regulatory clarity, like Bitcoin, or something that has uncertainty like XRP. So it was a big challenge. […] Regulatory clarity has allowed investments to flow into Bitcoin […]

But here in the US, when you talk about what JPM or Goldman Sachs are doing, they start with Bitcoin. Or even Square is an example, Square said they support Bitcoin and Bitcoin Cash, well I think this will be where they will be in 1 year, 2 years or 3? I am doubtful about this. […] I think the regulatory uncertainty has allowed people to focus on Bitcoin at the expense of some of the other technology platforms.

Ripple’s CEO went on to argue that his company was struggling with “fighting with one hand tied behind his back”. If there was more regulatory certainty from the US, Ripple would have already signed more customers for On-Demand Liquidity and XRP Ledger:

I would have been there more [customers], if there was regulatory clarity? And that’s 100% certain, again this week I’ve been on a call with the CEO of a pretty big player, and there’s no doubt that in the absence of regulatory clarity, people are like ‘well, let’s wait and see’. Because they don’t want to finish […] in a position where they invested a lot of money to support the technology and then do something different.

When asked about the expected IPO earlier this year, Garlinghouse said COVID-19 played a significant role in ensuring that its blockchain or cryptocurrency companies, including Ripple, did not go public in 2020. However, the target of an IPO is still valid, stressed Garlinghouse:

[…] and what I said then was like “Ripple doesn’t want to be the first, and I think Ripple doesn’t want to be the last”, I said something like that. And that’s generally how I feel now, we’ve continued to grow the business […] So I feel good as we continue to build the business and there are very strong networking effects. […] and I feel great about the position we are in.

At the end of the interview, Ripple’s CEO also revealed that central banks have shown interest in using the XRP ledger to issue stablecoins. Specifically Garlinghouse explained:

We certainly know that central banks look to XRP Ledger as an open-source technology for issuing stablecoins. And this can happen, frankly, it’s an open source technology, so we don’t necessarily need to get involved in that. But as experts in using XRP Ledger, some are talking to us and trying to help and we think this could be good for the overall dynamics of the XRP community.