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00:00Rough week for all crypto currencies and report how do you follow all the back and forth. I mean is it like a roller coaster for you Are you checking your phone every five seconds . I mean sort of talk to me about your heart rate. You know it's funny my heart rate definitely does move. That said I try not to check it more than once a day. And the reason and the same thing I say internally I would say here is I don't think this success over a three week or three month period I think about it over a three year or five year period. And at the core I think all this comes down to are we solving real problems for real customers and the crypto market overall. If digital assets solving a problem then it's going to drive some value. There's a lot of action in this market though it's not clear what value it's really providing. What are the problems you think ripple is solving what's a ripple is solving a problem for cross-border payments today as you may have experienced personally when you're moving money from here in San Francisco to Paris it literally is faster to go buy an airplane ticket and fly it there than it is to use the correspondent banking system . That's crazy that we live in a world of instant information from Bloomberg or anywhere any time. I keep my own money from point A to Point B efficiently so it ripples solving the problem to enable real time settlement between financial institutions. So do you think there'll be a bounce back. Well I think we've already seen the markets bounce back some. They don't fall day to day but the peak of the market probably mid-January. The total asset class was over eight hundred billion dollars. It dropped down to maybe three billion. And I think today it's back to the 450 or so. Now that's a ton of volatility. My counsel for anyone following these markets is don't follow it day to day. You if you believe this is fundamentally a movement that's changing the nature of a new asset class that I think you should measure that over months and years not day to day level is doing really well at the end of last year. There's talk about it being the next bitcoin is that like a benchmark for you . Well look I don't think there's going to be one size fits all . I have publicly disclosed that I'm actually personally long bitcoin. I think Bitcoin increasingly is digital gold and it's a store of value but Bitcoin isn't going to solve a payments problem. You know the time it takes to confirm a Bitcoin transaction on average is about three to four hours right now and per transaction the fees are around 15 dollars per transaction. That's faster than Swift. But in contrast SRP is a thousand times faster and a thousand times cheaper. So it's a fraction of a sense to confirm a transaction and it takes three seconds to complete a transaction. So I look at Bitcoin as solving a different problem that what SRP is solving and I don't think there's going to be one digital asset to rule them all. I think you're going to see multiple players have success in this market. I think that's how the market is behaving where you have kind of a little bit of quality rising to the top and how the overall market caps have been trending. A lot of the volatility is due to regulation and presumably there will be more regulation. What are you expecting. Well I hope there's more regulation. I think if we want this whole asset class to grow up and mature Of course there should be regulation. In fact those that I think combat regulation I think aren't really thinking about the benefit the revolution of block chain is not going to happen from outside the system. It's going to happen from within the system and governments aren't going to go away and banks are going to go away and you know some in the bitcoin community come from that kind of anarchistic liberal libertarian view. I think of one the reasons why repeal has been very successful is because we're working with the system. You know we count the Bank of England as a customer. The Saudi Arabian Monetary Authority is a customer so central banks are working with Ripple today. We expect that to continue in the future for sure. What do you think the regulation should be. Well I think you know the regulations shouldn't change much and what I mean by that is when you're executing a transaction using ripple software you're going through one regulated financial institution to another regulated financial institution. Your KYC requirements Jensen know your customer requirements your AML anti money lender requirements your BSA bank seeks Yasha Bank Secrecy Act requirements. That doesn't change because the bank is doing that on both ends. We're just making the plumbing much more efficient much faster much cheaper. And so from my point that the regulatory dynamics here we should continue to have regulated financial systems and it when people think ah oh my gosh the regulator is going to change I think SRP isn't circumventing any regulation so I'm not I'm not that too concerned about it. And what about what's happening in Asia . Does that concern you. Well what concerns me is that I think that concerns me is that if we throw the baby out with the bathwater and I think we really understand that not all digital assets are the same. We did a op ed piece written by our chief compliance officer. Kind of just talk about some of the differences and you have some digital assets that are designed for anonymity. They're designed to circumvent regulation that literally I saw one founder of a company talking about his digital asset. He's like Yeah we're for drug dealers and people on tax evasion. Of course there's gonna be enforcement against that. I think that that's crazy to me that he would in a public setting you know say that in contrast SRP is working with central governments. It's working with central banks. It's working within the regulatory framework and you certainly we're embracing the fact there should be regulatory frameworks applied to the digital asset in crypto market. So you just partnered with Leon Leon. Leon the end. That's the one of the largest payment digital wallet payment companies in China. So what does this mean and what other partnerships to come. Well certainly we think about an interoperable world of all but its banks . LINDLAND pay you know that the pay teams of the world the even the pay powers of the world and we think about how do we enable interoperability and very low friction between them. We're going to continue to work with players across the world. I think if people understand really value proposition you know our pipeline of partners and customers has certainly grown and I'm excited to come back and keep you posted on those customer announcements. All right. The year in bitcoin cryptocurrency 2018 we expecting. Well I think despite the volatility I think here you can see you see a lot of bullish behavior that the volatility will continue the volatility we saw continue where we're in the adolescent stage of developing a new asset class and I think you know you're going to continue you volatility . The thing that's very different and I've been out in Silicon Valley for about 20 years the thing is very different what's happening now versus the dot.com bubble is the dot com bubble it was the institutional investors who were in and then retail came on top in price things up the exact opposite has happened here . You have retail and kind of speculative interest already in the market and now you have institutional money starting to come in . If you have fixed supply which most digital assets EV supply and you have increasing demand I think that's a bullish dynamic that's going to continue to create some tailwinds for the digital asset market in 2018 .

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Ripple CEO Favors More Regulation of the Crypto Market

Brad Garlinghouse, Ripple chief executive officer, discusses the state of the crypto market with Bloomberg's Emily Chang at the Goldman Sachs Technology and Internet Conference in San Francisco. (Source: Bloomberg)

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