Chris Larsen on Crypto, Ripple, and ICOs

At LendIt Fintech, Ripple co-founder and Chairman Chris Larsen got real in his on-stage conversation with Jo Ann Barefoot. This is what you missed:

I think this is a fundamental shift in fintech and what we believe the big thing happening here is the development of a second internet. We call it the internet of value so that value, money, assets will begin moving as quickly and efficiently as data has been moving for the last 25 years

Using SWIFT is like sending a letter. You know, when drop it in the mailbox, you have no idea where it is, if it got there or not. So, getting away from that I think is profound. And what we would say is that, you know, a lot of the backlash from globalization today, it’s not because globalization is bad. It’s essential. It’s that it’s incomplete because globalization needs kind of 3 key systems to be working together and it needs interoperability and data.

I think all new technologies start with a, you know, screw the government, disruption, tear everything down. So, I think that’s natural and then, you know, the internet started that way too and then it has to sort of grow up. And particularly, it’s solving real world problems. Real world problems are always more complicated than that. And then when you switch to finance, this is different. Right? You know, the internet was mostly technology. Mostly. It’s just now kind of crashing into regulatory issues.

I think on some of the other things like ICOs, we’re pretty anti-ICO. I think it’s a bad thing to get involved with from the founder’s perspective because, you know, if you’re a founder and you can raise money many ways today, do you really want to do something where you’re going to have the SEC, you know, kind of threat hanging over your head for 10 years with strict liability? You just don’t want that. You know, that’s a problem.

[..]From building currencies, digital assets, ICOs typically say, “Okay. There’s a currency for this use case and none other.” That’s kind of the opposite of the way it should go. Currencies need to be as liquid as possible. And so, they’re going to have as many use cases as possible. For XRP for example, the kind of early beachhead has been cross border payments, but we see that as just the beginning of something that really has a multitude of use cases. To get as liquid as possible, that’s what drives utility and value at the end of the day. So, I think in all fronts ICOs are problematic and that’s why you’re seeing the regulators crack down on them, not everywhere, but I think they’ll be transformed. They’ll probably look like, you know, IPOs at the end of the day.