Ripple’s growth has slowed in large part due to the U.S. Securities and Exchange Commission’s lawsuit against the company, but it is pushing ahead to expand its payments business globally, said Ripple CEO Brad Garlinghouse today, at the Consensus by CoinDesk 2021 conference taking place this week.
“In Southeast Asia, one of our fastest growing segments, we see activity growth 10X year on year,” Garlinghouse said.
The company saw 40% quarter-on-quarter growth in terms of transactions across the network last year, but growth slowed after the SEC filed its lawsuit against Ripple in December 2020, alleging that its sale of XRP was an unregistered securities offering worth over US$1.38 billion.
Following the SEC lawsuit, many U.S. exchanges delisted XRP, and MoneyGram, the world’s second largest money transfer service, also suspended its partnership with Ripple. MoneyGram and Ripple had a consequential relationship of about a couple billion dollars of ODL [On-Demand Liquidity] transactions, Garlinghouse said. “We’ve paused that partnership in hopes of getting [regulatory] clarity.”
Nonetheless, Ripple continues to enjoy strong support in parts of Asia, including Japan, and is also looking at serving the new and growing area of central bank digital currencies (CBDCs).
“CBDCs on a domestic basis is good for reducing friction and payments… What Ripple is trying to solve, and is using XRP, for that cross-border efficiency, is that bridge asset,” Garlinghouse said. “We have as part of the public open-source version of the XRP ledger, we have worked with some governments around the world and continue to work with governments around the world.”
SEC v. Ripple lawsuit
The lawsuit is currently in its discovery phase, with the SEC and Ripple battling over what information must be shared with the other side. “I feel really good,” Garlinghouse said, adding that he was pleased that the judge clearly understood the nuances and importance of the case for crypto in the U.S.
“The good news was the court did grant Ripple’s motion,” Garlinghouse said, referring to the court order compelling the SEC to share its confidential internal communications over XRP, Bitcoin and Ethereum. “It’s really the first time [the SEC has] been ordered by a court to be transparent about this. All we’ve asked for, for two to three years, is that regulatory clarity, and so I think this is progress.”
“Unfortunately, it moves slowly,” Garlinghouse added. “I’m hopeful that as a new SEC administration comes it sees that there’s an opportunity to kind of revisit some of the previous administration’s decisions.”
Saying that “there’s a massive gap in leadership here in the United States,” Garlinghouse cited Japan, Singapore, U.K., Switzerland, and the United Arab Emirates as “examples of markets where there has been clarity, and that certainty and clarity allow entrepreneurs, allow investors, to invest and go forward.”
“One of the great ironies about this whole thing is the SEC’s mission is to protect investors,” Garlinghouse said. “And in this particular case you have the exact investors they purport to protect have filed a lawsuit against the SEC for that supposed protection.”
“This is about more than just Ripple, this is about more than just XRP,” Garlinghouse said. “It really does have implications for all of crypto here in the United States.”
See related article: SEC and XRP holders face off anew over SEC’s lawsuit against Ripple
Will Ripple go public?
Garlinghouse also said that “the likelihood that Ripple is a public company is very high at some point.” But he noted that given that Ripple is in the middle of an SEC lawsuit, it would be “easier to do that after you have closure and clarity and that regulatory certainty we have been seeking for so long.”