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At the FII Priority event, in a panel moderated by New York Post columnist Lydia Moynihan, Ripple CEO Brad Garlinghouse detailed the company’s stablecoin strategy, the future of the industry, and regulatory developments in Washington.
Garlinghouse, explaining why Ripple launched its RLUSD stablecoin, recalled that two years ago the company minted 20% of the entire $USDC supply. Stating that Ripple’s core business model is cross-border payments and that it has managed over $100 billion in payment flows to date, the CEO posed the question, “Why don’t we do this ourselves?” He also mentioned that the depegging of $USDC following the Silicon Valley Bank collapse was a contributing factor, and highlighted Ripple’s strong balance sheet ($60-70 billion in crypto assets and $4 billion in cash), stating that they are ideally positioned for an institution-focused, fully compliant stablecoin.
The panel also discussed competition and the future structure of the stablecoin market. Garlinghouse, noting that the top 5 stablecoins dominate approximately 90% of the market, answered the question of whether the sector would become more crowded or consolidated with the passage of the GENIUS Act. “In the short term, we will see more fragmentation and experimentation, but in the long term, institutional consolidation will occur,” said the CEO, predicting that stablecoins will specialize in different solutions. He cited Ripple’s acquisition of New York Financial Services Department (NYDFS) and OCC licenses as examples, highlighting the importance of compliance and transparency. He also stated that he viewed Tether’s commitment to re-regulation positively.
Garlinghouse also offered his opinion on the debate about whether banks should issue their own stablecoins. “Big banks are considering it, but do we really need 50 different dollar stablecoins?” he asked. He reiterated that the fragmentation that would be created by assets like JPM Coin and BofA Coin accepting each other would evolve into specialized consolidation in the long term, highlighting the potential for short-term fragmentation.
“Clarity Act to Pass in May”
Touching on the regulatory agenda in Washington, Garlinghouse said that the GENIUS Act, passed last summer, triggered demand for stablecoins and that CFOs of Fortune 2000 companies are excited about using these tools. He stated that the CLARITY Act should be a “fast-track” law that would clarify the distinction between securities and commodities. Expressing that banks have reopened the yield/yield debate, the CEO stated that Ripple is not taking sides on this issue, but that White House support is important. Saying that significant progress has been made, unlike the “crypto war” during the Biden administration, Garlinghouse predicted that the CLARITY Act would pass by the end of May: “Compromise is reached when they are most tired and frustrated. We are at that point.”
At the end of the panel, Garlinghouse concluded with his famous quote: “People overestimate what will happen in 5 years and underestimate what will happen in 10 years.” He predicted that the stablecoin-based payment wave would arrive quickly, blockchain technology would be relegated to the background, and the “crypto company” concept would disappear.
*This is not investment advice.