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Ripple CEO Brad Garlinghouse says he doesn’t think cryptocurrencies like Bitcoin and XRP will be used by the average consumer anytime soon.
In a new interview at The Economic Club of New York, Garlinghouse says he thinks the primary initial use case for crypto assets will be in the world of enterprise cross-border payments.
But he doesn’t think people will be paying for goods and services with crypto on a large scale in the near term.
“XRP, in my judgement, and really any crypto – I don’t think the use case is a consumer use case today. I imagine some percentage of the people in this room, before coming this morning, stopped at Starbucks. And you had no trouble paying. You used a Visa. Maybe you had dollars in your pocket, I don’t know.
But it worked. And so when people talk about using crypto for a consumer use case, I go to the – well, what problem are we trying to solve? If there’s not a problem, then let’s not force change into it. People aren’t going to adopt a new thing unless it’s helping you in some way.”
Garlinghouse says there may be an exception in third-world countries, where access to capital is often more difficult.
“There are markets that have already lost control of their currency, where the transaction costs for a Visa transaction isn’t 150 basis points or 200 basis points. It’s 800 basis points.
And you go to Argentina and you get a menu and it has three prices on it. One is to pay in dollars. One is to pay in Argentinian pesos and currency. And another is to pay with a credit card. Is there a risk for Argentina that cryptocurrencies are solving a problem? Yeah.
I just don’t think that’s – with 95% of global GDP I don’t think you need to use a cryptocurrency to solve a fiat problem.
I think that’s one of the biggest mistakes Libra, Facebook’s white paper [is making]. They kind of positioned it as a new fiat currency, and that of course raises the ire of lots of governments.”
Rising levels of Bitcoin volume on the peer-to-peer platform LocalBitcoins has indicated some people in Venezuela, which continues to suffer from crippling inflation, may be purchasing BTC to try to keep the value of their capital from plummeting.
Meanwhile, a growing number of crypto payment platforms are emerging in the US and around the world in a push to give people the option to spend their crypto.
The payments company Flexa recently added support for Bitcoin, Bitcoin Cash, Ether and Gemini dollars to its payments app called SPEDN. The app reportedly allows people to pay with crypto in mainstream retail outlets in the US including Baskin Robbins, Bed Bath & Beyond, Crate and Barrel, Gamestop, Nordstrom and Whole Foods.
Several other platforms including Pundi X, Spend App and BRD allow users to spend their crypto in the real world.