Miguel Vias: XRP's Future for Cross-Border Payments (Episode 175)

Transcript

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which talks about the Technologies projects and startups driving ke centralization and the global blockchain Revolution my name is Brian faan cran and I'm M Roy today we'll talk to Miguel vas who is head of xrp markets at Ripple we're going to walk through topics such as the overall vision of Ripple uh what xrp is setting out to solve and its its utility and some of the future plans uh Ripple would have around xrp and uh and around xrp the math based currency so before we start let's have a quick intro from Miguel Miguel tell us a bit about your background and how you came to be interested in this technology sure Mah guys again um thanks for for having me on uh it's an absolute

pleasure and an honor to be on a part I've been following you guys for about a year and a half so uh when I got the opportunity to to do it I was pretty excited so thank you so I found Ripple in early 2014 um I had started to follow the Bitcoin space tangentially and um after the runup started to do research on other coins and seeing what what else was out there and read the uh the consensus white paper and was immediately visc viscerally attracted to the Elegance of of the solution um it it did feel like a like an iteration on what was already out there and maybe an improvement so uh I immediately bought you know INX RP as uh my fiance then

would let me and my wife now no longer lets me um and started following the company uh at the time I was at the CME and I was uh involved in some of the digitization projects internally I was involved in some of the Venture projects and became friendly with roomie Morales who run CME Ventures and she and I you know both big Ripple fans CME is an investor and basically just fly on the wall kept following the company and in in the fall of last year I got a call uh from Justin sta who is on roomy's team and Justin said hey you know Ripple's looking for somebody to help them build

the xrp markets do you know anybody who might be able to help and I said look I'd love to help Ripple any way I can obviously I'm a huge fan of the company and turns out they had an office in New York which I was not expecting it was an easy decision so you mentioned CME before right so that's a Chicago mertile Exchange right yep Chicago Mercantile Exchange largest Futures Exchange in the world when I made the move to Ripple I was running their precious metals desk uh product Suite if you will um largest Futures product Suite in the world so uh there's a lot of synergy that between and pre previous to that I was a Trader for 11 years mostly bulge bracket

investment Banks all in precious metals and in options so the move actually over to digital assets is a pretty seamless one given that there are some pretty significant similarities between precious metals and digital assets right I mean Bitcoin is often called digital gold um you know the immutability of it the fact that it doesn't degrade the fact that there's a limited supply all of those things kind of transfer over um and I I think you're you're watching those worlds meet um pretty quickly in fact every time I turn around somebody's trying to digitize gold and I I always I always kind of Wonder well isn't that what you know what some of these other assets are supposed to be so for me the the move from my uh from almost a uh like a fundamental understanding

perspective was pretty simple and how do those markets that we see today in in the cryptocurrency in the blockchain space compared to you know those more mature precious metal markets that you were working with before it's important to recognize that the digital asset space is pretty small I mean it's getting bigger um every day it seems like there's more interest and more money flowing into the space but if you take the the market capitalization of all of the digital assets I mean maybe you get the 30 billion maybe and you know that is a few hours trading on a really busy FX desk um you know you're talking when you're talking Capital

markets and foreign exchange and securities you're talking trillions and trillions and trillions of dollars so you know I I don't mention the point in order to belittle the digital asset space but only to point out that it's very early in its development it's got a long way to go um one of my goals in particular for xrp is to get it to that level so institutional grade liquidity um which we we know we have our work cut out for us there but that is the goal the other the biggest comparison of the thing the thing that always uh enamors me about these markets is the volatility I mean I what's happening now right now is absolutely all inspiring in terms of volatility um especially after last week in the uh the Bitcoin ETF decision you

know I think the markets have caught many many people off guard and you know part of my job internally is to make sure that I I communicate to the company what's happening in these markets and try to make sense out of it um which is difficult given how op a lot of it is some of it on purpose obviously and you know I think if you look at the markets over the last few weeks after the Bitcoin ETF I think most people expected Bitcoin to absolutely fall out of you know out of the sky and it didn't um in fact it had a little down move and then it came right back up it feels to me like that gave folks uh like Fiat investors if you will or speculators a lot of confidence and they they jumped back into the space but as you guys

pointed out last week I I watch watch the the uh the poly chain podcast and you guys were talking about sort of the scalability issues and the fact that the confirmation times are slow when there's chatter about a hard fork in Bitcoin because the community can't quite seem to figure out what's best for itself you know the crypto space knows that very well right I mean that is not some secret I I'm not even really deeply in mesed in in in in the space the ways traditionalists are and even I know that right so I think what you've seen over the last few weeks is the smart crypto money if you will flow out of Bitcoin into these other digital assets right as the Fiat money has flowed in so you're kind of watching this cycling effect which has been absolutely mesmerizing to

to witness so yeah it's interesting times that's very interesting how you you point that you could certainly be right where do you think this is going to go with the markets what are your expectations regarding Bitcoin regarding um ether and maybe regarding uh the overall uh space I mean I guess ether is perhaps you know at this point most some people's nines because that has just been going up uh in insane bubble like reminiscent of I guess Bitcoin new 2013 you know it's it's difficult to tell given given again I think the relative small number of players in the space the relative small market caps difficult to say okay who's going to win this uh what are the prices going to be

like I mean it's it's Crystal bar right I mean you just mentioned the fact that I might be right about my analysis of what's happening I could totally be wrong because truthfully nobody knows right people have conjecture all day but I think what will what is not um what is not debatable is that what you're watching is certain digital assets gravitate towards certain use cases and start to prove their utility and as a result are driving value into those coins right so the the ethereum Tailwind has very much to do with the fact it seems like it really has some usage um it really has utility for some larger institutions I do I will say I do find it somewhat confusing in that most of

what the the ethereum use cases are are revolve around are private instances of ether or of ethereum not necessarily public instances so I understand from a marketing perspective how it's a huge Boon I guess time will tell whether or not you know those word worlds all start start to interoperate and you know one of the things that we're big on um and I know you guys have have had Stefan on the Pod and and and EV as well we are very big on interoperability um you know this idea that one asset will not win the space one Ledger will not win the space there are likely to be many different use cases many different coins that fit perfectly for different use cases that

then need to talk to each other for Value to transfer seamlessly um so uh yeah I I think that that is something that we're all going to watch happen and we're very much focused on so like your answer brings uh brings me to the next topic which is uh I'd like to I'd like you to explain uh what the term internet of value means right so whenever whenever you go to the Ripple website I think most prominently this term features that you Ripple is building the internet of value what is it really sure so the from a level the the goal of the company is to move money as efficiently as information moves today so if you think of you know the

internet right I mean I can send you information instantaneously but if I want to send you value especially cross border um that's not really possible and you know Brad our CEO likes to always mention the fact that if you wanted to send $110,000 right now to the UK the fastest way to do it would be to hop on a plane um it's uh you you know that that's not where we should be in 2017 so when when we say we we want to create this inter internet of value that's at a very high level what we mean we want money to flow as easily as information do there as an international traveler when I'm traveling around the world I actually to me whenever I swipe a credit card it feels to me that money does flow

instantaneously and money does flow cheaply and the whole system seems to work seems to work well right like now now now what Ripple is in in some sense saying is that okay there's there's a need for an internet of value where money has to flow better is it the case that you're solving a non-existent problem no I mean if you look at if you look at International payments right the failure rate is 3 to 5% um usually yes you don't see it because someone is taking the pain on for you um and as a result you don't you don't end up feeling it directly you do end up feel it in terms of what you pay for some of the services that you're receiving um so if you can

streamline the back end actually cost lower value flows more easily Commerce happens more quickly I mean if you look at a company like Uber or Amazon that has to send you know millions of payments a year to thousands of people to hundreds of thousands of people maybe millions of people globally um using an old batch and file system um you know many Uber drivers today still get paid bi-weekly why why can't you just swipe your card and have the money flow like if I'm in Bangalore and I have a Us credit card believe you me when I swipe that card that driver is not getting paid instantaneously right um that's going to take a little while for him to actually

get the money so you know these these new corporates in particular are very much driving the demand for small value high volume International you know crossb payments and as we as we've built out our Solutions so if you think of think of Ripple having um kind of Three core Technologies one is called Ripple solution and you know that very much solves for operational inefficiencies at the messaging level between banks for instance right and that still leaves an issue for funding of payments right so if a bank wants to send a payment from Brazil um to India

uh it's like it likely has and it's an International Bank it's an hspc Bank let's say it likely has to have funds at both those locations funds that just sit there do nothing basically waiting for payments to happen right that's capital that is not being efficiently used so that drives prices up and capital is not getting any cheaper so the messaging Ripple solution will s for that messaging operational issue it does not solve for the liquidity problem that's where xrp and RCL come in right for small value High high volume International payments digital assets and xrp in particular are absolutely perfect right so the the the liquidity on demand if you will so instead of having to fund these payments what the bank could do is take the RS buy xrp

move the xrp and then sell it for rupee and deliver it locally in India that can happen in seconds um whereas using traditional rails it could take days so that's the kind of the the the second leg of the stool and then the Third Leg of the stool is IOP and Inger protocol um which then allows that bank Ledger irrespective of which liquidity solution it's using connect to other ledgers globally so you know that might be the Visa Ledger it might be the MasterCard Ledger it could be the allei pay Ledger um but allowing all of those ledgers to talk to each other is key um especially as you see more and more growth in these um in these type of payment companies these blockchain based companies that's

quite interesting I think we'll spend most of the time going through all of these components of the answer okay so so ripples then then thesis is that I mean the difference between let's say 20 years ago uh so I think the like a lot of the financial systems that exist today came about after the first wave of computerization like in the' 70s and ' 80s yeah and and at that time um the the need of the hour was mostly corporate payments right some company in the in the US paying another another company in China and corporate payments were like large value and they could afford to be slow right because it it's it's it's a

large value payment so even if it reaches like 3 days later that's fine but what you're essentially saying is now that with the development of like these platforms like uber Airbnb or um all of these new internet businesses like we starting to get like Global Payments that are like you $20 from Miguel to M and and across different countries and maybe the need for these like small value payments quick payments is going to be the trigger for building a new B system based on cryptography you said it much more eloquently than I ever could May here thank you thank you that that that's

exactly right right we're building sort of infrastructure 2.0 payment infrastructure 2.0 um the analogy we use internally um usually revolves around shipping containers and how you know when the infrastructure for shipping things globally went from you know wooden crates to standardized metal shipping containers Commerce exploded 700% right um so if you can Grease the wheels of Commerce and payments are certainly one of the pain points of those gears if you can grease those gears then things move much more quickly and commerce happens much more and you create growth as a result yeah and uh one one sort of analogy that I've also heard uh or seen a few times that kind of just explains

how uh how broken payments are is that you know often if I want to pay you know um her in us now then if I'm actually going to go on a plane with the cash and fly over there and hand it to you right that will often be faster than uh trying to make a bank transfer a bank wire and uh and also some area where this is not strictly a payments issue but where the just the Brokenness becomes very obvious is when you look at the international trade and you have you know cargo that being shipped but uh to the execution of for example a letter of credit which is essentially sort of the payment right

and the terms around it would take longer than actually it takes the cargo to get there and and so it kind of makes it obvious just how ridiculously inefficient a lot of these processes are it should be no surprise to to folks in the tech space that you know um Innovation tends to move up much more quickly than than infrastructure does and infrastructure sort of you know it's big and clunky it's hard to change um so it's quite the challenge for infrastructure to catch up the Commerce um you know Commerce and Technology move at lightning speed so let's take a break to talk about The Ledger Nano s the new flagship Hardware wallet by Ledger I'll pass it over to Ledger CTO nikolaa who can tell you all about Ledger's security features and SDK

so Ledger Nano s is a personal security device based on a secure element screen and button so that you can verify everything that is done on device and make sure that you are really doing what you want it to do compar to our previous solution this device is based on a latest generation secure element the st31 from STD micro the st31 is is using a secure arm core which means that you can have the same ease of development that you would have on a generic microcontroller but benefit from the security features of a secure element security features include an application firewall at the lowest level that let you protect applications from each other which means that you can load multiple application on the hardware wallet even

post insurance and you as a developer will be able to leverage these features to load your own application without our authorization and without any kind of authorization from the vendor we will be providing this device with an open SDK um that let you do anything you want with this device we provide sample applications for cryptocurrencies different cryptocurrencies so Bitcoin ethereum uh uh we will also provide a pho authenticator and you will be free to add everything you like for example you could ask some secure messaging some encrypted chat and you'll see that the solution is quite powerful and very easy to develop with the Nano s sets the new standard in Hardware wallet security and

usability you can get yours today at Ledger wallet.com and when you do be sure to use the offer code epicenter to get 10% off your first order we'd like to thank Ledger for their supportive epicenter one of the topics we wanted to cover on briefly was um basically the transformation Ripple has gone through because Ripple used to be um mayher I guess you know he's been following the company for a long time and you have as well right where Ripple was more focused on uh peer to here payments and and money and and now it's very institutionally focused what what is your point of view on on that transformation like as I mentioned and M

and I were talking about earlier I started following him in 24 2014 I had a ripple trade account um you know it's where I bought my first xrp uh so I I I was in there with you and uh I too saw a bit of a change right and a lot of that um some of it was just foresight I mean if you look at the way um and I know this is going to be a little self- serving so I apologize in advance but it we were we were ahead in terms of the institutional use cases I think of some of these other initiatives right so we were talking about ethereum earlier very much clearly focused on Enterprise and businesses not retail in

any way shape or form not you know C Toc in any way shape or form um and you're seeing these other blockchainbased initiatives do the same thing now D um hyperledger I mean you name it right everybody is focusing on businesses and and fixing infrastructure like we were just talking about using either you know distributed Ledger technology or blockchain so that actually was happening I think in late 2014 early 2015 in the company and again I've been here all of four months so my timeline may be a little skewed um but certainly I think you know one of the one of the defin moments for the company was the finsen ruling in 2015 when we got fined by finsen for some relatively minor kyc AML infractions but

infractions nonetheless and um you know looking back on it I don't think it it's a surprise um you know fintech startup in San Francisco having airtight kyc AML um kind of procedures is probably asking a bit much but neither here nor there it happened and at that point there were some serious restrictions around what we could do with retail use cases so um luckily for the company the the focus was already moving towards institutions and the banks in particular and I've said this internally a few times over the last few months you know I can only imagine what it must have felt like for the folks inside of Ripple uh the day after the finsen ruling comes out as

they've already decided to focus on banks right it's like oh nice we're going to build this whole startup uh trying to help financial institutions but these guys just told us that you know we're not good at a few things but interestingly it it actually ended up helping the company quite a bit because when you go through something like that it means you've been pretty deeply vetted by a regulator so the banks have a certain amount of uh confidence in working with you now because you have been legitimized a little bit um and and there there's also like this you've joined the club of getting fined because every bank has gotten fined for something so uh it it

ended up actually not being something bad at all for the for the bank use case and and helping the company quite a bit um and you've seen I mean look you know we work with 90 Banks globally um you we we have 15 in production deployments um it has helped the organization become Enterprise grade you know to the point where I mean I don't know if you guys saw the the bank of England announcement today but Bank of England is using our technology to to POC payments internationally using uh Ripple solution and IOP you know that doesn't happen um probably to if I'm being honest or Fair without that finsen ruling so at the time I'm sure it felt like an existential threat but it ended up being

great for the company why did the fine exactly happen so it's it's it's all public um and it's uh I can I can send you guys all the wonderful links it made it makes for wonderful bedtime reading um but basically uh if if I remember correctly there was a few folks on uh customers of xrp 2 which is our financial entity that hadn't been properly kyc AML kyc means know your customer AML means anti-money laundering it's a very big deal when you're dealing with digital assets given some of the history in the space so um yeah that was it so moving a bit to to the topic of xrp well by the way my favorite Topic in the whole wide world so we could talk

about this for a long very good okay well then let's move to the topic of xrp um now xrp is at least from an Outsiders perspective it seems like in the past xrp was very much at the center of Ripple strategy you know it was like okay Ripple is going to build this network that people going to use move money around Ripple owns a lot of xrp xrp is going to increase in value and that's kind of the business model and now my impression has been that this has changed in Ripple that the focus is shifted to other areas uh where you know now the software being built for banks has being licensed and support being done and things like that so what's what

is xrp and what's the evolution that xrp has taken as part of Ripple's strategy yeah I know it's it's a great question it's it's one I I Revel in being able to answer in a public for um because I I get the question a lot privately so as we mentioned right there there definitely was uh there was a shift ongoing early in 15 late 14 to more an Institutional use case for the company generally um and I can't speak to whether or not How Deeply that involved xrp RCL directly because I wasn't there um but obviously finsen put the breaks on RCL a little bit right in terms of usage so when we move to to start building software for banks um you know

at the time if if you're talking was that 2015 um you know that was before the the term blockchain was very popular um you know back then it was just cryptocurrencies and you know they sometimes didn't have the greatest reputation right so uh Banks weren't exactly jumping in or leaning in if you will with respect to digital asset which was fine right so all that all that happened was it became a sequencing sort of strategy and the idea is look we're going to build you software that's going to help you no matter what we're going to help you operationally up here and you'll notice as we move forward and as

we develop that the perfect liquidity solution for some of your biggest pain points is going to be xrp RCL and you'll come around to using it when you realize that and when you become more comfortable and I think we started to see that in 2016 where all of a sudden everything blockchain was fine like I'll I'll never forget yeah it was 2016 consensus versus 2015 consensus in New York and it was literally like a c change like from 2015 to 2016 I felt like the whole established Enterprise world had figured out distributed Ledger technology and blockchain it was Unreal um so that then allowed I think uh a reemergence if you will of xrp RC as a

liquidity as a liquidity story currently though I I am AB absolutely fascinated by where we are with respect to the payment space because in that time in these 18 to 24 months you've seing a whole new type of payment company emerge right I'm talking about VH wire guys like pay case that use um the blockchain for payments right and today primarily because of the liquidity that is all going through Bitcoin but you know and I'm not I'm not a Bitcoin basher in any way sh perform but if we're being honest you know Bitcoin is not the best asset for payments because the confirmation time

is slow and getting slower so the the strategy right now inside of Ripple is very much and that's why I'm here is to build Fiat xrp liquidity in order to run payments through it right so the goal and you watched our um I don't know if you guys I don't think you guys follow it that closely so I will tell you that in U in December we launched um we launched xrp on bitstamp um we're working with a few other digital asset exchanges to continue to launch it in different currencies right so that we can start to build the liquidity for that use case that I that I that I described earlier where someone could easily run a payment from Brazil to India um in seconds and there is no doubt in my mind that given all the

wonderful attributes of every other coin out there that for payments because of the operational efficiency because the cons the consensus mechanism so efficient and everything happens so quickly that xrp is the best the best digital asset for payments um so that's that's the use case and I spoke earlier about how value for any digital asset is is going to end up being driven by utility in the long run in the short run you're going to get whatever you get and people buy and sell things for a myriad reasons in the long run if your asset isn't useful then it's not going to be around so that's our that's our used for is very squarely in payments I mean after all we're a payments company or

payments software company so so the idea is that XR is going to be used as this bridge currency so when uh when the flow of money needs to go from say I don't know from from India until Mexico so so that is the INR and the Mexican peso they may not be a direct Market between the INR and the Mexican peso just because there's very few people that want to do this kind of movement so you're trying kind of pitching xrp as this asset in the middle that asset has a strong Market with INR and that haset has has a deep Market with u the Mexican peso right and then uh somebody can easily go through

go from in to Mexican PES or back very easily yep like who do you imagine will do this is is the future that in the future it's going to be small Banks Med Banks big Banks doing this kind of transfer or is it going to be retail people like me and Brian in different countries using uh the Ripple system and xrp to do it yeah I I think it's going to be I mean if I if I have my wish my here it'll be everybody um but I think um I think people will use it and it'll end up going through some sort of a funnel um that then ends up using that liquidity so not you directly like you are not

going to send you are not going to be a Money Services business that does this transaction but you'll deal with a Money Services business that does it or with a bank that does it if you look at the banks that we work with they're almost exclusively International U again because we're trying to very much solve for crossb payment issues and the the the the use case for xrp speaks directly to that so I think if I'm looking at a timeline right and one of the reasons that I'm so excited about these blockchainbased msbs um is that this is happening now right so the use case is is real right there this is not a POC this is in production um the the

challenge for me is going to be putting together the ecosystem that then allows for people to do the same thing that they're doing now um in Bitcoin uh n xrp um not easy right um you know it's a little like hurting cats you have to list you have to partner you have to incentivize you know on bitstamp we put together a volume incentive program or we help bitstamp put together a volume incentive program and funded that we put a market rebate program so that people could come in and trade for free and um sort of attract some of that retail paper to trade on the exchange if you look at a market and this isn't you know this is not a hard and fast rule but if you have a market where you have a third liquidity providers and market makers a

third Traders whether they're professional or retail doesn't really matter and then a third hedgers people who actually are using that liquidity for something you have a very healthy market right the first bit is pretty easy to get I mean you know I've been building liquidity for a while and all you do is pay folks to provide liquidity um the other two are a little bit more challenging and you know we can partner with the hedgers um and then we have to build interest in xrp and rco in order to bring more of the sort of uh Trader Community if you will like back in 2015 or 2016 I used to see uh a lot of Articles and a lot of

interest around U using Bitcoin as an international payment rail where I am sending money to somebody else across the world I am in my fiat currency that other guy is in his own fiat currency but the way um I send the payment is in the middle there is like some company that uses Bitcoin as the rails so it takes money from me in my fat currency converts into Bitcoin transfers it over the Bitcoin Network and does another exchange on the other side and send sends it to the recipient so I uh the the retail user doesn't get to see Bitcoin at all like behind the curtain it's like the Bitcoin rails that are doing um all of the uh the work right and I I I remember they were like

venture capitalist that were like saying this this is the future there's lots of it and now what what I feel as if you're saying is it's it's a very similar model to that with the exception that you're saying that instead of Bitcoin you want to uh push xrp in that role and the reason you trying to push xrp in this role is a you work for ripple but B uh that you're designing the Ripple Ledger or the Ripple infrastructure just for that particular use case well it it's designed um it's it's it's very much a payments focused ledger so um you know for instance we have a we have this

feature on Ledger called payment channels which allows you to do I think upwards of 50,000 transactions per second just like lightning except that we're live right so um you know we have these things that are already scalable um in order to run really high volume through the ledger so yeah it's it's designed for it the reason one of the reasons I joined Ripple is that they had the perfect sort of app if you will right in interledger Plus Solution um for the perfect digital asset for that app so it was like a marriage it was to me it made so much sense it was like well yeah this is

perfect like you marry these three pieces of Technology together and you basically revolutionized International payments so yeah I want to do that um and it's it's why I joined and um you know obviously now that I'm I'm an employee uh I want to do it even more but the look if you look at everything that we did um directly on RCL on Ledger right in 2014 if you look at two examples in particular Ripple trade and RPP the Ripple payments platform both of which had to go away both of those use cases Ripple trade being an on Ledger exchange where people can trade and then RPP basically being exactly that mechanism you just described where Fiat

comes in transfers to xrp moves and then transfers out to Fiat both those use cases are happening they are it's a it's a thriving part of the digital asset ecosystem right so you know again I think the the the sequencing of it um from an external perspective seems odd right because it seems like oh well and look I get the question a lot you know is is xrp RCL still part of the Ripple kind of story and I I can't tell you how much it is and the the fact that um you know now it's sort of clear as day how all of these worlds are emerging and we have the perfect asset for it or or maintain the perfect Ledger for it um is

incredibly exciting so U yeah that's definitely what we want to do so Ripple and xrp have you know there's been a lot of controversy around it I think this is even in the past and a lot of it was around at least my understanding is is one xrp and and the distribution of xrp can you run us a little bit through what those controversies are I I think the the thing that controversy Brian what are you talking about come on no way I've never heard any of this before yeah sure and um look when when the David and and Arthur um created The Ledger and you

know created the basically the whole amount uh of xrp um they donated a bunch to the company right with the idea that the company would use this These funds to basically Usher the the technology forward um instead of instead of depending on a sort of a broad network of folks who may have interest or not have interest in developing the technology um they they went another route and they said look this is we're going to take this big stash of xrp we're going to give it to this company and you the company is going to build out the technology using it as a source for funding um I can see how that might have seemed somewhat disingenuous four years ago right um I mean here these

people create all this value and there was a lot of kind of shady things happening in the space at the time so you have no way to tell whether or not the folks who are doing this are actually being honest and truthful or whether or not you know it's going to be it's going to end up being something that's it's that's not real right uh and some sort of a fraud 4 years later we fund um through VC money and through and through xrp I don't know maybe the best C++ team in the world in our Ripple D team that constantly maintains and updates that ledger basically 24 hours a day and I only know that because I'm on slack at weird hours of the night and see these guys working um we've taken you know like if you go to our office

it's not like the office is filled with Ferraris and Lamborghinis and we're all throwing you know champagne truffle parties the money goes right back into the tech so I feel like the company's been a hell of a steward of the technology and has really worked incredibly hard to build a mature product that works well that is scalable that is stable yeah I mean look it was a different model and um I think there's there's certain there's a certain ethos in the space that you know wasn't at the time um in favor or understood it or believed it but I don't know I I I think at this point it would be hard to argue with the track record but so so right now can you run us through like how many uh xrp exist

and like how many are owned by Ripple labs and how many are owned by you know do you have some idea about who else owns the rest of you know purchase those those institutional individual yeah so so we own I think it's roughly 63 billion of the 100 billion that that was created initially the 30 seven that's out in the wild if you will is some of it is Founders some of it is institutionalsales obviously not perfect because once you let it go it's it's gone or people buy it they buy it um so yeah that that's that's the rough

breakdown and and look we so I mentioned that we've been building we've been building some interesting functionality on The Ledger and just yesterday we put out a release um for this uh this um function on Ledger that allows you to cryptographically lock um you know basically a payment so I think one of the things that we struggle with is the fact that there's no Supply schedule for xrp right um it's just like this lump sum of xrp sits over at Ripple labs and people are like what are you guys doing with that what are you guys going to do with that right I'm starting to think about you know maybe putting some real structure around a supply schedule uh and figuring

out a way if maybe cryptographically we can do that to Plate some some of the controversy and fears around the supply my here I would actually love your opinion on that actually because I know you've been in the space for a long time do you think that would be worthwhile yeah I'm sure that could provide some certainty right if you're like okay you going to you know sell this amount of xrp you know at a specific frequency uh you know for the next five years uh I I can I certainly can imagine that that would help you know alleviate concerns people might have around um around buying xrp yeah with all of these cryptocurrencies especially the ones

that have become very successful there's there's always this narrative right so with with Bitcoin The Narrative now has become its digital gold predominantly it's something that's that will that will be scarce right with ethereum the whole narrative is smart contracts are important there's going to be one platform that wins and smart contracts and you're going to need something to need something as gas and this currency will do that uhhuh like in this interview what's kind of coming out very clearly is that that for for Ripple uh the thing you're saying is like xrp that you're going to make all the efforts in order to make xrp as this

bridge currency between currency pairs for payments so if xrp ends up becoming this bridge currency then um then a lot of people would would find utility I like sorry I like to say that the goal is to make it the the institutional digital standard for international value transfer institutional digital stand standard for international value transfer I think I think that that is good so so that is the target it it's going after so I think I think for for a prospective from the perspective of prospective investor that is good to see uh what it is going after what would definitely be nice is more clarity on what the total Supply is going to be because some people are seem

to be uncertain that um can you create more than 100 billion units of xrp no no it's a literally impossible you would have to you know you would have to Fork the network and create another another coin like imagine you know every single one if not every single one but many other digital assets have a supply schedule and you know exactly what the Maxes and once you hit that Max that's that's it you're done same thing in xrp except the max happen at Inception so there's 100 billion and we can't do in fact every time xrp is used the infantes small amount gets destroyed so it's actually the supply is actually going down with with xrp most of the xrp will be distributed by Ripple Labs right so

are you taking some measures in order to introduce transparency into where these xrp are being distributed and how they will be done so look at at the moment one of the ways one of the most aggressive ways that we're Distributing xrp is by funding liquidity liquidity programs on off Ledger exchanges right so the the volume and Center program at bitstamp and the market rebate program at St we're all funded through xrp um you know if we partner with folks and there's a payment involved it happens through xrp right so I think as we build out so one of the things that I find very interesting about the Bitcoin space is that everybody's long Bitcoin in the Bitcoin space and as a result they all really want Bitcoin to do well so they

all work together they all build this ecosystem they invest in each other right um and there's a sort of virtual cycle that's created a really healthy ecosystem that starts with the owner with ownership of the asset right so as we start to build out our ecosystem off Ledger right and start to partner with digal asset exchanges and folks like bitco I don't know if you guys saw the announcement with bitco but we're working on an xrp solution for storage with bitco we we end up putting xrp in different hands right so it starts to start it starts to proliferate a little bit inside of the ecosystem so that people then have a vested interest in making it work right so you start to tie those incentives together look we I don't know if you guys saw uh a few

weeks after I joined we published a Q4 markets report um I did see you know and I I I want to flesh that out more I want to be more transparent with what we're doing with the xrp um in terms of institutional buyers if we sell any if we buy any um you know I want I want to start to give the market that Clarity there are some things that I can't do right I I can't give names to people like that you know we've transacted p with there that's not you know there's ndas and there's confidentiality agreements so there are limits to how much we can say um but I am very much pushing for more transparency I think it's I think it's good especially because we're not we're not doing we're

not doing anything wrong right so it's like well why wouldn't we be more transparent part of it I think has just been again um I think it's been a little bit of resourcing uh it's a small company you know we've gone from 80 to 140 people I think I think in the last 12 months um they haven't had a real like down and dirty Market person in in in the building um so I I definitely build a different I bring a different point of view in terms of what can help us build these markets out grow liquidity and I I agree I mean I look four months ago I was outside these walls and I was having the same questions right so now that I'm inside the walls I can I can hopefully start to answer some of those and lay some of the

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their support of epicenter so the idea behind like these Distributing these xrp tokens would be like so so imagine like there's this small bank right um let's a mediumsized bank and you today the bank has like system X in order to send money internationally right so that that system X is something else it's it's correspondent banking or whatever it is or or whatever it is right now now ideally you want like this bank that might be based in Mexico to actually transfer some of their International money transfer activities through the LI Ripple Ledger right sure so so you in a

sense you go to them and and you go and tell them that hey you guys transfer your activity to our to to this Ledger when they end up making that transfer that provides liquidity right because they will need to exchange Mexican peso for X xrp so that creates liquidity between those two pairs but in order to incentivize that behavior of them switching over here you give them some xrp you say hey take I don't know take these 100 million xrp keep them and if the ecosystem succeeds then you will make uh capital gains on what we've given you I mean is it like that not not quite with not quite with banks um you know the I think as we sort of early on

build the ecosystem certainly that's the strategy with more sort of the digital asset world if you will right um you know the example I gave of sort of the the Bitcoin ecosystem investing in itself because everybody has Bitcoin doesn't definitely does not apply to the banks yet right because the banks don't have any digital assets on their books so you know I I would struggle to see us do that um with a bank at least in the next 18 to 24 months I don't know I don't know how useful that would be I think the pitch to a bank would be look and we just put out a cost savings model on the website I think two days ago or three days ago which shows very clearly when you integrate all of our Solutions

how much you save right so the bank should have an appetite for running certain payments through our rails um using the enterprise software using interledger and xrp quite naturally um I think if I'm being if I'm being 100% Frank I think the challenge for even a second or a third tier bank is where they're going to Source the liquidity from and that's something that I'm trying to solve for right I mean if somebody wants to send up a payment from meico to India at the moment we don't have a Mexican rail for xrp right not even on a digital asset exchange and you know maybe Banks get to a point where they're comfortable dealing at digital asset exchanges because these you know

like bitstamp for instance is fully regulated and they have banking relationships and definitely the the worlds are coming together so I think I think we'll get to a point where yeah banks no problem we'll connect you know to coinbase or Kraken or bitso or you know whoever it is and Source liquidity that way okay um or you know the other alternative could be that as this space grows and as liquidity for xrp grows and we get more we get closer to that goal of institutional standard places like a Bloomberg tradebook or an fx all or a Reuters direct they start to list digital Assets Now these are very traditional Capital markets affs liquidity

pools um if we get to that point then becomes very easy for a bank to run a payment through um Through The Ledger right but really it's all liquidity dependent um which is really what you're solving for with respect to the crossb payment with xrp so Mel what do you find most challenging and Most Fascinating in this process of trying to establish these markets you know built this liquidity I mean it's it's challenging and I mentioned the analogy of kind of cat hurting um you know really trying to put together a rail if you will right like an endtoend rail with two digital

asset exchanges with liquidity providers with Traders and then on top of that a payments company to run the payments through there I mean that I get tired just saying that um so if we're talking about the actual work of doing it it's it's pretty arduous um but at the same time you know I joined the company I think maybe somewhat I idealistically as we all do when we take big leaps and and and big uh big risks um because I've always believed from the minute I read the consensus the white paper on the consensus mechanism for xrp I believed it had the the capability of changing

the world and you know I've had conversations with you know Chris Larson and Arthur and David around the fact that it is I think transformational software that um we we kind of owe it our best effort to get it to where it belongs and where it deserves to be so you know being part of a team that's focused on doing that and um you know literally doing something that's never been done before it's pretty cool my wife thinks I'm nuts because every other word out of my mouth these days is xrp and I seem to be working you know 27 hours a day and having dreams about payment rails um but

I I firmly believe that that that's that's how you get to do something really special and the company is um it's amazing what it's been able to achieve um incredibly solid our our leadership is amazing and um I think we're on a a path that hopefully we'll all look back someday and be like wow I can't believe I was a part of that um so yeah I'm I'm obviously pretty stoked like how do you intend to distribute the re of rest of the xrp then yeah that's that's a good question my here and I I don't necessarily know that we'll ever distribute all of it in my mind's eye there's a possibility where you know we end up more of a lending kind of uh you know more of a

lending lender of Last Resort capacity maybe I think that would be a little strange for a software company and maybe some things would have to to change structurally maybe we have to have a different organization or something who knows right um but as these Capital markets develop as liquidity develops there are going to be folks who you know if they want to provide liquidity in the asset don't want to necessarily own the asset because that puts them In Harm's Way for Price movements so if you can borrow the asset and create liquidity that way it's actually a much more efficient way to be part of the uh of the liquidity mechanism it's how traditional Capital markets work I mean my first job on a trading desk was managing the repo book the overnight Tom next kind of liquidity provision that

every day we had to roll um there's nothing like that in digital assets um so part partly because they they the transfers happen instantaneously but also partly because it just hasn't developed and it one of my longer term goals after I get the ecosystem built out after I get payments running through there as I start to merge I try to merge the Two Worlds the digital asset markets and the traditional capital markets as I try to do that I think one of the levers that we'll be able to pull or pull will be lending and as a result I don't necessarily know that we'll I mean we'll have to we'll need some xrp right in order to do that um so I don't I don't I guess along with's way of saying I'm not

sure we'll ever get rid of all of it and sort of let it all out into the wild um partly because there is some utility for us or maybe some other you know organization having it to make sure that the markets are always liquid does that mean there isn't like a clear plan or schedule on how these are going to be distributed T TBD TBD it's a TBD yeah and what one one question to me would be so like looking looking at the at the eyes of xrp from a prospective investor right um so it's like when when I try to put think when I think of putting money in ethereum I go and look

at uh what daps are being built because the assumption is there'll be daps and this value will go up right uh with with Bitcoin at least I used to go and see blockchain do info the number of wallets growing per year is it really happening that was my that was my that used to be my my metric now xrb is trying to be this liquidity solution or Bridge currency what do you think is the right metric that neutral observers can look at and um and see whether it's whether it's working it's going whether it's working or not it's going down a good path and and some data that cannot be just created out of thin air even by Ripple so what what is that kind of data

yeah I so remember we were talking a little earlier around what's happening in digital asset markets today with Fiat flowing into Bitcoin and then some of that crypto money kind of flowing back into the other digital assets um if you look at the liquidity of all these other digital assets if you look at uh ethereum and you look at Monero and you look at Dash and Litecoin the vast majority of the liquidity is versus Bitcoin 85% of the trading volume in every single one of those other assets is is versus BTC it is not Fiat it is not Fiat money running into those spaces right so my litness test how I know if I'm succeeding is how much Fiat volume we have versus xrp because payments

happen in Fiat nobody is paying for anything in any other digital asset at the moment right so as we build out the ecosystem as we get listings as we get liquidity as we get payments flowing through it what you should see is more and more Fiat volume um and less and less any other digital asset volume versus xrp that's how you'll know at least from an objective perspective right I mean we'll signal to the market what's happening we'll updates we'll we'll obviously send press releases and um you know inform everyone of the progress but to your point you know that's that's our job so you you want a a neutral uh a neutral Limpus test and I

think that would be the cleanest one cool well Miguel thanks so much for coming on today h and sharing a bit about xrp I think a lot of people you know they they'll see an xrp they kind of know about it but hopefully that'll helps and dive a little bit deeper in on this understanding what exactly xrp is and and what's coming for xrp so thanks so much for coming on oh no guys again I I can't thank you enough it's been a it's been really fun to be able to talk to you guys about it um I look forward to doing it again sometime I'm certainly very excited to see what what's going to come out of Ripple I mean it is uh I guess the biggest or certainly one of the very biggest um blockchain companies in the space you know probably together with R3

and and consensus or something like that uh so yeah I'm I'm very thrilled to see kind of what what kind of experience and PCs really pan out and what we're going to see going into production uh coming out of Ripple or coming out of any of the other companies that have been working so intensively on this so yeah thanks so much for coming on oh yeah thank you guys I appreciate it and uh thanks so much for our listener for once again tuning in we are part of ler piton Network you find this show and other shows on let's talk bitcoin.com and if you want to support the show you can do so by leaving us an iTunes review that helps new people find the show and it makes us very happy so thanks so much and we look forward to being back next week

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