Speaker 1: You've got a good plan in place. I think part
Speaker 1: of the trust that we're bringing to the stable coin
Speaker 1: market is around Ripple's brand. They're proven ability to withstand
Speaker 1: pressures that occur, and certainly the balance sheet that Ripple
Speaker 1: has I think will provide a lot of confidence and
Speaker 1: stability sure into the issuance of that.
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Speaker 2: the link in the description. Jack, great to see you.
Speaker 2: How are you enjoying the conference so far?
Speaker 1: It's great, it's great, a lot of positive energy here,
Speaker 1: a beautiful place. Always nice to be in Miami. What's
Speaker 1: not to like?
Speaker 3: Have you gotten any beach time in by any chance?
Speaker 1: I jumped in the ocean quickly yesterday and tried this morning,
Speaker 1: and the towels weren't out yet, and so I didn't
Speaker 1: want to run through the lobby soaking wet, so I
Speaker 1: held off. I'll get back in though, oh for sure.
Speaker 2: Well lucky you, because I'm not going to have any time.
Speaker 2: I have to get out of here by tomorrow. But anyway, Jack,
Speaker 2: we've spoken over the years. Your title is s VP
Speaker 2: of stable Coins at Ripple, and very timely, very on
Speaker 2: topic because r l U s d H is around
Speaker 2: the corner to be launched.
Speaker 3: Tell us about the r l U s d stable coin.
Speaker 1: Well, it's a dollar back stable coin. Really right down
Speaker 1: the middle of the fairway in terms of the attributes. UH.
Speaker 1: In terms of how we're bringing it, it's a heavily
Speaker 1: regulated UH. It will be once approved, heavily reg regulated
Speaker 1: stable coin backed very conservatively by US dollar and dollar equivalent.
Speaker 1: So we can talk a little bit more about that
Speaker 1: monthly at testations by third party audit firm, highly credible
Speaker 1: partners in terms of the reserve management, the banking partners
Speaker 1: we're working with. We're launching it on both the ethereum
Speaker 1: and XRPL ledger, which is a big deal, which we're
Speaker 1: quite excited about, sure and uh really eager to get going.
Speaker 1: We've been testing for for some time, and i'd say,
Speaker 1: and I'm been sure testing phase both internally and then
Speaker 1: more recently with third parties. So we're excut.
Speaker 2: You mentioned the XRP ledger and etherorem. One of the
Speaker 2: things that we see other competitors are doing is launching
Speaker 2: an other blockchain. So are their plans to expand eventually
Speaker 2: to other blockchains that have more interoopability.
Speaker 1: Yeah, I think the fact that we launched a one
Speaker 1: not only the XRPL but also in Etheroeum tells you
Speaker 1: that we recognize that there are other ones that the
Speaker 1: market will want to utilize, and we want to be
Speaker 1: supportive and collaborative there. So it's not a winner take
Speaker 1: all either with just one stable point out there or
Speaker 1: just one chain. So my sense is that we will
Speaker 1: launch on other chains over time. That's certainly in our
Speaker 1: product roadmap. We are quite excited about the opportunity to
Speaker 1: launch this on the XRPL for obvious reasons. We feel
Speaker 1: like it's a very advantageous one from a cost, from
Speaker 1: a speed, from a security stability standpoint, and there are
Speaker 1: a lot of native use cases within the XRPL ecosystem
Speaker 1: that are eager for a stable cooin on that chain,
Speaker 1: So we're excited about what opportunities exist there.
Speaker 3: So, speaking of native.
Speaker 2: Demand, your current clients, whether it be payment companies or banks,
Speaker 2: are you planning to Are they planning to leverage this
Speaker 2: of in talks you probably can't name names and so.
Speaker 3: Forth, but are they planning to leverage it to move money?
Speaker 1: Yeah? I mean we've been historically a pretty large mentor
Speaker 1: of stable coins in our payments business. We had a
Speaker 1: panel earlier this morning. We talked about one of the
Speaker 1: real world use cases for stable coins specifically as cross
Speaker 1: border payments, remittances, etc. And that's been a core kind
Speaker 1: of bedrock or foundational piece of Ripples business from you know,
Speaker 1: over the past twelve years, and so we've borne witness
Speaker 1: to the use case within payments that has evolved over
Speaker 1: time with stable coins. And while we won't exclusively use
Speaker 1: r O USD in the payments business, we do think
Speaker 1: that it will over the near term be the default
Speaker 1: stable coin being used along with others, but we'll certainly
Speaker 1: use that there. And we've been speaking to our partners
Speaker 1: our clients about that, hearing pain points that may exist
Speaker 1: with other stables, or more constructively, kind of a wish
Speaker 1: list of attributes or features that a stable coin would have.
Speaker 1: A lot of that has to do with the regulatory
Speaker 1: footprint that we're bringing to bear. Part of that has
Speaker 1: to do with the costs associated with it as well,
Speaker 1: the lack of friction, the speed. There's a number of
Speaker 1: I think really positive use cases and just being part
Speaker 1: of that flywheel that will get created, you know, with
Speaker 1: the different market participants of interest to people.
Speaker 2: Sure tell us a bit about the reserves will that
Speaker 2: consists of US treasuries and what are some of the
Speaker 2: steps you're going to take to avoid any type of
Speaker 2: deep pegging situations like what happened with Silbrigate Bank and USDC.
Speaker 1: We say boring is the new sexy around here. So
Speaker 1: that the reserves are going to be again very conservatively
Speaker 1: constructed as part of our application process of submitted a
Speaker 1: reserve management policy document. There's going to be a healthy
Speaker 1: balance of cash in the reserves. Cash cash and everything
Speaker 1: else is a US dollar dollar equivalent, so it could
Speaker 1: be money market funds or treasury bills, but that's it.
Speaker 1: There are no other assets beyond cash equivalent highly liquid
Speaker 1: UH and you know to be there for the purposes
Speaker 1: of meeting any redemptions. You know they come through where
Speaker 1: users want to swap out their stable and get their
Speaker 1: dollar back, and so feel very good about that. Again,
Speaker 1: very very conservative from a deep pegging standpoint. We run
Speaker 1: a number of different analysis such would that you've got
Speaker 1: a good plan in place. I think part of the
Speaker 1: trust that we're bringing to the stable coin market is
Speaker 1: around Ripple's brand. They're proven ability to withstand UH pressures,
Speaker 1: you know that that occur, and certainly the balance sheet
Speaker 1: that Ripple has I think will provide a lot of
Speaker 1: confidence and stability sure into the issuance of that. When
Speaker 1: the other reserve banks failed a couple of years ago.
Speaker 1: I think there were a number of lessons learned the
Speaker 1: end of the day, and DFS has guidance around the
Speaker 1: types of banks that are suitable in terms of custing reserves.
Speaker 1: You know, we're into ultimately the too big to fail.
Speaker 1: Is there a scenario where you know, all banks can
Speaker 1: fail theoretically along the continuum possible? I guess the answers yes,
Speaker 1: But you and I don't want to be there, and
Speaker 1: I think we're going to have bigger problems when that happens.
Speaker 1: But we've chosen very robust partners to work with, and
Speaker 1: so again it's one of the aspects that I mentioned
Speaker 1: at first. You know, we're judged by the company we keep.
Speaker 1: We want to partner with the best and the brightest
Speaker 1: out there from an institutional standpoint, and all of our
Speaker 1: stablecoin business is institutional, so it's really a B to B.
Speaker 1: Some of our institutional distribution partners will support more retail
Speaker 1: use cases, but our direct relationship with distributors and other
Speaker 1: ecosystem partners are all institutional.
Speaker 2: Now, on that note of having these banking partners. So
Speaker 2: will the reserves be spread across different banking partners, maybe
Speaker 2: some of which you already have to mitigate any type
Speaker 2: of centralized failing situation like a silvergate.
Speaker 1: That's right, and over time we expect that there are
Speaker 1: scenarios where we could have multiple banks holding reserves, and
Speaker 1: that will evolve over time. I think also as we
Speaker 1: expand the geographic footprint, you know, there are many jurisdictions
Speaker 1: that will be able to operate in with our current
Speaker 1: regulatory portfolio if you will. And I think there are
Speaker 1: other jurisdictions where over time will seek other licenses, and
Speaker 1: those different regional jurisdictions may have requirements to house reserves
Speaker 1: in different places, so that we'll have a knock on
Speaker 1: effect and a positive way of distributing any risk from
Speaker 1: a bank counter party standpoint.
Speaker 2: There, gotcha, this is something I've been thinking about over
Speaker 2: the years. And you may not be able to tank
Speaker 2: to this, But do you eventually see stable coin issues
Speaker 2: like Ripple having to plug in directly to the US
Speaker 2: Treasury at some point?
Speaker 3: I don't know.
Speaker 2: I was thinking about that after the Silvigate situation, but
Speaker 2: or we're too far away from that.
Speaker 1: Well, we're not there yet. And again, you know, I
Speaker 1: think different geographic jurisdictions may have different requirements. Sometimes, you know,
Speaker 1: banks will have access to the FED window if you're
Speaker 1: a depository institution. Most of the stable coins that are
Speaker 1: issued today are either not regulated, the largest falling into
Speaker 1: that camp. Others are regulated out of money transmitter licenses
Speaker 1: and a subset of minority in the US elise are
Speaker 1: issued through trust companies, and so Standard Custody, which is
Speaker 1: the applicant for the stable coin license, is a limited
Speaker 1: purpose trust company. As such, we don't have direct access
Speaker 1: to the FED window today. That could change over time
Speaker 1: if we were to either expand the license footprint and
Speaker 1: what we could do as a depository, But today we're
Speaker 1: not depository through the trust company license that we have.
Speaker 1: And then, for that matter, no other issue that I'm
Speaker 1: aware of in the industry as a direct access to
Speaker 1: the or other central bank.
Speaker 2: What's your plan for market penetration. There's obviously some established
Speaker 2: players in the market, and the stable coin wars, if
Speaker 2: you want to call it, that is heating up. But
Speaker 2: let's say into markets, let's ham in South America, what
Speaker 2: is plans there?
Speaker 3: What are your plans there?
Speaker 1: The answer is yes, we're going to penetrate the markets.
Speaker 1: One of the benefits of doing this from Ripple is
Speaker 1: a twelve year infrastructure of partnerships that they've built out
Speaker 1: really across the globe. There's a corresponding portfolio of licenses
Speaker 1: that we get to slipstream behind. In many cases where
Speaker 1: there's already a regulatory framework set in place in certain
Speaker 1: corridors where the legacy Ripple Payments business already as well established,
Speaker 1: it's mature and so there is a native demand already
Speaker 1: in those marketplaces. So not going into specifics, what we'll
Speaker 1: be launching is the issuer out of the US. We've
Speaker 1: got a very global mind frame in terms of how
Speaker 1: we're going to bring this to market, distributed both in
Speaker 1: concert with some of our existing partnerships, existing rails that
Speaker 1: we have our corridors on the payment side, or with
Speaker 1: exchanges that we work with for the payments, and also
Speaker 1: some new use cases frankly that have come to mind
Speaker 1: since we've been talking about it internally over the last
Speaker 1: six months and really educated our sales and client management
Speaker 1: teams or new use cases that are coming naturally as
Speaker 1: part of a conversation when those customers and partners and
Speaker 1: clients are engaged in a conversation where they say, hey,
Speaker 1: here's another opportunity or another use case that may have
Speaker 1: not existed in the past and would be perfect for
Speaker 1: a stable coin. And so I think the past isn't
Speaker 1: necessarily our future in terms of where we see stable
Speaker 1: coins being used.
Speaker 2: Now, some of the partners you mentioned, I know there
Speaker 2: were some exchange partners that were announced today.
Speaker 3: Tell us about those and how they'll be integrating our LUSD.
Speaker 1: Yeah, so today we announced a number of day one partners,
Speaker 1: some exchanges, you know, the bit Stamps, the Upholds of
Speaker 1: the World, Bullish, We announced some market makers B two
Speaker 1: C two, key Rock. We announced some on and off
Speaker 1: ramp partners as well, Moonpay being one of them. Trying
Speaker 1: to think it was in a release because we have
Speaker 1: another partners who are signed on that we haven't announced
Speaker 1: yet or in the process of coming over, and so
Speaker 1: that will evolve over time. When we do get regulatory
Speaker 1: approval and when we do actually launch, we'll announce other partnerships,
Speaker 1: and so it's really a broad and diverse approach to
Speaker 1: bringing it to market. Obviously, it has to be made
Speaker 1: available and that's where the exchanges come in. The market
Speaker 1: makers provide really requisite liquidity to the marketplace in many cases,
Speaker 1: and depending upon the application, someone like moonpay twenty two
Speaker 1: million wallets that exist out there, they provide a key
Speaker 1: piece of infrastructure or zero hash or others that help
Speaker 1: us connect with other ecosystem partners who might go that
Speaker 1: last mile, whether it's a payment rail, whether it's a
Speaker 1: you know, consumer application, et cetera. And again, all of
Speaker 1: our direct customer relationships are all institutional, but we do
Speaker 1: have partnerships that will help us get our USD you know,
Speaker 1: into more use cases. Frankly, we also, in addition to
Speaker 1: those third parties, as I referenced earlier, have a number
Speaker 1: of native use cases. I think it's one of those
Speaker 1: aspects that sets Ripple apart, isn't Issuer. So not only
Speaker 1: do we have the regulatory compliant footprint, the licensed approach
Speaker 1: that we're doing it with. Not only do we have
Speaker 1: the balance sheet and the brand recognition and the reputation
Speaker 1: for trust, but we also have these native use cases
Speaker 1: around custody. Through the medical acquisition that Ripple made a
Speaker 1: year and a half ago, there's some really interesting r
Speaker 1: WA tokenization opportunities with Ripple custody that we're excited about
Speaker 1: some opportunities within the pain business, which you've already spoken about,
Speaker 1: some opportunities with Ripple Impact and some of the pilanthropic
Speaker 1: X you know, opportunities that Ripple has has been promoting,
Speaker 1: and so quite excited to be doing it from this platform.
Speaker 2: So Jack, not to get ahead of ourselves. Obviously excited
Speaker 2: for our l USD once that's up and running and
Speaker 2: in the wild, is there going.
Speaker 1: To be an rl EU are Yeah, a common question
Speaker 1: if I were to close my eyes and open them,
Speaker 1: you know, three years from now. I think the answer
Speaker 1: to that is yes, And I think there will be
Speaker 1: other FIAT backed stable coins that have a role to play,
Speaker 1: and certainly Ripple's global footprint supports that. And there's an
Speaker 1: opportunity to leverage infrastructure, leverage, licenses, leverage partners we have
Speaker 1: in different jurisdictions to bring that to Baron. We've already
Speaker 1: been speaking to some of the of our partners around that.
Speaker 1: I think today the fact that I don't know if
Speaker 1: it's ninety five percent or something like that of demand
Speaker 1: for sable coins is for US dollar back stable coins, yeah,
Speaker 1: and so we want to address that market need first,
Speaker 1: and I would say we're certainly watching and ready and
Speaker 1: poised to capitalize on the growth where we see inklings
Speaker 1: or early signals growth, and I think that will happen.
Speaker 1: I'm very bullish, as you might suspect on the broader
Speaker 1: growth story for stable coins generally speaking, and I don't
Speaker 1: think in the future they're all going to be a
Speaker 1: US dollar back. So it's just a little premature outside
Speaker 1: the US dollar back today and we've got job number
Speaker 1: one is to get our all usd launched and growing,
Speaker 1: and we'll focus on other featback stable coins after that.
Speaker 3: Sure.
Speaker 2: Well, yeah, to your point, I mean US dollar will
Speaker 2: reserve currency. Everybody wants a dollar, and especially in countries
Speaker 2: where they're handling hyperinflation and dealing with all that craziness,
Speaker 2: they want US dollars. So it would be awesome to
Speaker 2: have a stable coin backed by the US dollar. Do
Speaker 2: you feel that's the killer use case of blockchain right now?
Speaker 2: Is going to be more, but stable coins are the
Speaker 2: seems to be the game right Well, it's.
Speaker 1: In my title, so I've got to be stable coin first.
Speaker 1: But I think the other big exciting theme, and it's
Speaker 1: resonant here in a lot of the conversations and the
Speaker 1: panel discussions that SWELL is tokenization and real world assets,
Speaker 1: and I think the two go hand in hand, even
Speaker 1: if you think about stable coins being an on and
Speaker 1: off ramp into investing in our w A and tokenization,
Speaker 1: and so a lot of the issuers and exchanges and
Speaker 1: infrastructure providers for tokenization and r w A that we've
Speaker 1: been working with we're having corresponding conversations around stable coins
Speaker 1: as well. So I think those two thematically are probably
Speaker 1: the most exciting, and both I think lend themselves to
Speaker 1: the the use cases that really I think help open
Speaker 1: people's eyes to the benefits of crypto and digital assets
Speaker 1: who may have been more skeptical or who can look
Speaker 1: at a bitcoin or excerpt pay your eth and say
Speaker 1: it's just a speculative investment. Here are examples where particularly
Speaker 1: stable coin is, given the kind of bridge they sit between,
Speaker 1: you know, trad fying and web three, how it can
Speaker 1: make sense to people, particularly when you get into financial
Speaker 1: inclusion and remittances and you know there are stores of value.
Speaker 1: So I think I think it's a really exciting time
Speaker 1: for stables and tokenization.
Speaker 3: Yeah, for sure.
Speaker 2: So you envisioning that in the future, I'm not necessarily
Speaker 2: going to go from fiat to buying a tokenized version
Speaker 2: of a hotel in Miami Beach or something, but to
Speaker 2: a stable coin.
Speaker 3: Or have that.
Speaker 1: Well, it's having that option. Thinking about stables, you know
Speaker 1: they operate twenty four to seven. So if you decide
Speaker 1: to do it, you get woued at dinner on a
Speaker 1: Friday night and you want to buy a tokenized interest
Speaker 1: in the Faina hotel, That's tough to do when the
Speaker 1: banks are closed, yeah, Whereas if you have access to
Speaker 1: a stable coin, you know you can do that immediately
Speaker 1: and transfer that stable coin. So, I mean there's that
Speaker 1: level of support. There's also just the reality of once
Speaker 1: you are actively investing in the space and tokenizer digital assets,
Speaker 1: keeping your fiat type reserves or assets in a stable
Speaker 1: coin allows you to save the on and off of
Speaker 1: going from stable to fiat and fiat back to stable
Speaker 1: to just keep it in stable, right, and then you
Speaker 1: are much more poised and ready to move that around
Speaker 1: to transfer it in its courts of ripples belief around
Speaker 1: you know, the exchange of value, exchange of wealth, right,
Speaker 1: and so being able to do that through a digital asset,
Speaker 1: whether it's XRP or to the stable coin use case
Speaker 1: rl USD. I think both work very well in achieving
Speaker 1: that mission.
Speaker 2: I don't know, let me rephrase this actually will ripple
Speaker 2: or do you have any partners who may be interested
Speaker 2: in offering yield with the stable coin? I know coin
Speaker 2: based offers offers some sort of yield with us DC.
Speaker 1: Yeah, they do it through a rewards program, and I
Speaker 1: think I don't know exactly how that works. We've got
Speaker 1: a number of partners who run their own business, I
Speaker 1: mean in our worldview. If you will, you know the
Speaker 1: and this may evolve. It came up in a question
Speaker 1: earlier today on the stable coin panel. There's certainly there
Speaker 1: have been other instances where stable coins with a yield
Speaker 1: component have been issued outside the US or all sorts
Speaker 1: of security laws that exist today that would govern how
Speaker 1: you would bring a interest bearing stable coin to market,
Speaker 1: and that's a well proven path. There aren't a lot
Speaker 1: of precedents around it. But I think the guidelines are
Speaker 1: pretty clear from the SEC and others in terms of
Speaker 1: what that would look like. And so when I again
Speaker 1: close my eyes and open them three years from now,
Speaker 1: I think you will see more yield bearing stable coins
Speaker 1: and then maybe in different jurisdictions or here, but they'd
Speaker 1: be registered as a security. I think in the current
Speaker 1: form to your question, there are other partners who have
Speaker 1: similar sort of rewards programs or other incentives for folks
Speaker 1: to hold it. Our stable coin is not a yield
Speaker 1: sharing a stable coin where you know, the end users
Speaker 1: of or holders the stable coin where participate in the yield.
Speaker 2: Sure, So I guess it just depends on who creates
Speaker 2: whatever product, whatever third party, and if they want to offer.
Speaker 1: It, that's right, and that would be up to them,
Speaker 1: and that would be you know, scrutinized as as appropriate
Speaker 1: by whatever product they have, whatever regulatory framework they operate
Speaker 1: in or don't, and whatever region they're in. So mark
Speaker 1: for me to answer that part of the question for sure.
Speaker 2: Final item here, Over the years, we've spoken about grown
Speaker 2: adoption institutions.
Speaker 3: You know, the herd was coming. They were saying, Now
Speaker 3: the herd is here.
Speaker 1: Still here, the thundering herd, right, yeah.
Speaker 3: And I mean, are you blown away?
Speaker 2: But by all the things that happened this year ETFs,
Speaker 2: all the Wall Street tokenization is black rocks, custoding reserves
Speaker 2: for certain companies and so forth, what are your thoughts
Speaker 2: on all that.
Speaker 1: Yeah, it can't come soon enough for big enough, and
Speaker 1: I think it is. You know, we've talked over the years,
Speaker 1: Tony about evolution, not revolution, and so I think what
Speaker 1: we've seen this year is consistent. I think this has
Speaker 1: been a big year for digital assets writ large, and
Speaker 1: you touched upon a few, and I think Blackrock has
Speaker 1: been very credentializing for traditional finance to see what they've
Speaker 1: done in others and the Wisdom Trees of the World
Speaker 1: and Fidelity and other big names Aberdeen that are active
Speaker 1: in the space, and I think they will continue to
Speaker 1: push the envelope. The volume isn't what we all expect
Speaker 1: it to be, but you have to start somewhere, and
Speaker 1: I think this crawl walk run phenomenon will play out.
Speaker 1: I think a year from now we'll see even more
Speaker 1: use cases, We'll see even more volume and higher levels
Speaker 1: of adoption. And so I'm quite excited about the progress
Speaker 1: you know, that we've seen and feel like we're very
Speaker 1: well positioned to take advantage of that and be a
Speaker 1: proponent and a catalyst for more growth. As I said,
Speaker 1: people want to work with trusted parties who are well financed,
Speaker 1: who are regulated. Who you know come through the front
Speaker 1: door and operate their business, and so that's what we're
Speaker 1: focused on doing. That's our playbook and we think good
Speaker 1: things are going to come.
Speaker 2: Well, Jack, I have to have a conversation with you
Speaker 2: in twenty twenty five.
Speaker 3: Thanks progressed, Thank you so much.
Speaker 1: Of course, thanks for having me