Brad Garlinghouse, the CEO of Ripple Inc, is concerned about the U.S. government’s recent jump into action after the announcement of Libra. In an interview with Fortune, July 25, 2019, Garlinghouse speaks about his discontent with Trump’s bunching of cryptocurrencies, and the potential regulatory conundrum that Libra has awoken.
The Libra Shake-up
After the announcement of Libra, cryptocurrency enthusiasts were overjoyed that one of the largest American companies was interested in exploring the space. Today, after multiple Congressional hearings and comments from top bureaucrats, the joy has faded and only angst remains.
The most concerning thing to one of the most powerful men in cryptocurrency is the grouping of cryptocurrencies by President Trump. In a series of tweets, Trump said cryptocurrencies facilitate unlawful behavior. Garlinghouse is worried about Ripple being compared with the likes of Libra.
Ripple is fully compliant with KYC as most of their customers are commercial banks across the world; Ripple also comes under the wide bracket of ‘cryptocurrency companies’ but they facilitate the same activity that regular banks do.
Garlinghouse compared Trump’s classification to claiming that a person who doesn’t like Facebook doesn’t like any internet companies.
Ripple is not a decentralized protocol used to empower individuals – as Bitcoin is – and is meant to facilitate easy transfer of value through cross-currency transactions. The company is competing with the SWIFT protocol to become the standard for international transfers. Their current achievements and partnerships are helping them take steps toward this objective.
Libra has gotten central banks and governments across the world to awake from their crypto-skeptic slumber, provoking central banks to issue public statements that criticize Facebook’s lack of clarity with regards to know-your-customer (KYC) and anti-money laundering (AML) procedures.
Initially, Libra was expected to bring more legitimacy to the entire cryptocurrency sector, but this has proven to be a false narrative so far.
Libra has magnetized more regulators in two months than Bitcoin did in the last 10 years. The breaking point for Libra seems to be their inability to justify how they would prevent money laundering over their network. Whilst it is a legitimate concern, it’s ironic to see people who openly acknowledge Bank of America’s involvement with drug cartels exercise doubt over money laundering standards.