Ripple - Blockchain and Digital Asset Use in ASEAN: CEO Brad Garlinghouse in Convo with IMF’s Ross Leckow at Singapore Fintech Festival
CEO Brad Garlinghouse sat down with IMF’s Deputy General Counsel Ross Leckow for a fireside chat on Monday afternoon at the Singapore Fintech Festival. They engaged in a far-reaching dialogue on the opportunities blockchain and digital asset technology presents for financial institutions in ASEAN, given the the region’s unique regulatory frameworks. Both affirmed that this game-changing technology will change the world of global payments as we know it today. We’ve captured some key highlights from their conversation below.
Questions and Answers
Garlinghouse: What does Fintech mean to the IMF? What’s the IFM’s interest in it?
Leckow: The IMF is devoting a lot of attention to Fintech and blockchain. Blockchain technology must be discussed in the context of other technology trends, too, such as cloud computing, digital assets, APIs, mobile and more. Our member countries are looking for advice. They want to know how to approach and unlock benefits of Fintech while also putting together regulation to minimize the risks. In addition to publishing research, the IMF is engaging closely with private sector and industry.
ast year, we put in place a high-level advisory group of industry leaders from the public and private sector to help guide our work in Fintech. We are happy to have on this advisory board leaders like Chris Larsen, Executive Chairman of Ripple’s board of directors and former CEO and co-founder of Ripple, and Sopnendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore. We also launched, in conjunction with The World Bank, The Bali Fintech Agenda, which is the first comprehensive framework of issues that countries need to think about when designing policy for Fintech.
Leckow: From your perspective, what is going on in the private sector? What are the blockchain challenges and opportunities unique to the ASEAN market?
Garlinghouse: Regulatory clarity has a huge ability to drive digital asset and blockchain adoption. It is surprising how many markets still have uncertainty. But, in ASEAN, the regulatory environment for blockchain and digital asset technology is clear.
Several countries have contributed to this, including Singapore, Thailand and the Philippines. In particular, Thailand has introduced a framework that balances consumer protection with innovation. It legalizes several digital assets, including XRP, and provides clear and explicit guidelines for outside blockchain companies to operate.
This clear regulatory environment makes it easier to apply blockchain and digital asset technology to solve real-world business use cases, such as improving cross-border payments across the ASEAN region. The East Asian markets received $130 billion in inbound remittance payments last year alone. They are expensive, and the market is ripe for adoption of new technology, like blockchain, to drive costs dramatically lower.
In terms of challenges, it is true that historically the region has been behind by correspondent banking. Global banks are contracting some of their traditional correspondent relationships, and this is creating more friction in payments in ASEAN.
But some financial institutions are seeing this challenge as an opportunity. Nearly 50% of all of our global customers are based in the region, and our Singapore headquarters continues to be a growth engine for Ripple — expanding by 200% in the past year.
Garlinghouse: As the regulatory expert, what are the characteristics of ASEAN that you think will either propel this region forward in regards to blockchain, or stifle its path?
Leckow: When you discuss regulatory frameworks for blockchain and digital assets – globally, not just in ASEAN markets — the conversation is in an early stage and a lot more work needs to be done. Every country in this region also has very different needs. Some are further ahead than others in thinking through policy, and it’s not surprising that they’ve taken different regulatory approaches.
But, in the ASEAN region, there is general openness in embracing Fintech and allowing innovation to happen. Fintechs in this region are willing to engage with regulators and let them understand the technology, services and products that they’re producing in the early stages of development. Regulatory sandboxes in Singapore, Malaysia, Thailand and Indonesia are examples of this.
Regulators have also been willing to work with the private sector in this region to put frameworks in place when they see a good example of how technology can help solve a real problem, to allow the use case to develop. Cross-border remittance is a good example of a use case that is very important here. Regulators here have demonstrated a willingness to engage with each other and others around the world — a type of cross-border cooperation has emerged that involves the right stakeholders and helps develop solutions to solve for problems like this.
Leckow: It’s very apt that we are discussing the present and future of Fintech, and blockchain in Singapore. ASEAN, in particular, has leapfrogged much of the world in both innovation and thoughtful regulation of blockchain technologies. Brad, as you discussed earlier, cross-border payments in this region are a great use case for blockchain. Tell me more about why this is the case.
Garlinghouse: We see a high degree of pain in cross-border payments in terms of how long it takes, how much it costs and the surprising lack of transparency in each transaction.
We see this in ASEAN, in particular, because this region has been left behind by the correspondent banking network. Banks like Siam Commercial Bank (SCB) are moving aggressively to address this need, embracing digital asset and blockchain technology to solve these problems. SCB now serves as next-generation hub, a regional clearing partner on the network, to improve connectivity and coverage across these underserved areas. The bank is also able to make payments into the region faster with lower costs and greater transparency.
Blockchain and digital assets also solve for problems sourcing liquidity for cross-border payments. Today, approximately $10 trillion sits parked around the world in pre-funded accounts to enable these transfers. Ripple’s network leverages this powerful new technology to make cross-border exchanges work without the pre-funded accounts. By unlocking this capital, Ripple is helping to accelerate the global engine of commerce in a way that’s good for corporations and consumers throughout the region, and around the world.
Garlinghouse: I know that the IMF has had several big meetings lately. Have you discussed more about digital assets, and can you share what are the IMF’s views on these are?
Leckow: The IMF takes a balanced view. Each country has to decide for themselves what type of regulatory framework is best. But generally speaking, they should be cognizant of risk but also the potential to make the global system more efficient, more inclusive with this new technology.
The international community has been doing a lot of work on creating a framework for the regulation of digital assets. The basic approach has been to impose on new service providers, like exchanges, the customer due diligence that banks conduct in cross-border payments. Now, the community is working together. Entity-based regulation is complemented by activity-based regulation. Banks and exchanges are now subject to the same regulation
Regulation should be proportionate to the risks so that it does not stifle innovation. International cooperation in regulation, what can be accomplished when countries work together, is critical to achieving this goal.
Leckow: How will blockchain make a lasting impact on the global financial sector, and society more generally?
Garlinghouse: The big picture we are trying to solve at a macro level is enabling an Internet of Value — a world where value moves like information does today. The introduction of the Internet in the ‘90s has driven data interoperability and catalyzed opportunity for global commerce. But value interoperability, the seamless exchange of money around the world, does not exist today. Close to 3 billion people are unbanked, and there is tremendous opportunity for us to bring them into the community, into the global economy. We must totally change the nature of how payments flow around the world. We must remove the friction and make the stream of value more instantaneous and reliable.
XRP was number one by market capitalization on CMC last bull run
When i started to think why coinmarketcap.com does not reflect correct market capitalization of XRP i started calculate:
when XRP was at 1 USD market capitalization was close to 100 billion
when XRP was at 2 USD market capitalization was close to 200 billion
when XRP was at 2 USD market capitalization was close to 200 billion
when XRP was at 3.8 USD market capitalization was close to 380 billion
BTC was very close to 340 billion at his best
then i run in to this link
Introducing XRP Ledger (rippled) version 1.1.2
XRP Ledger (
rippled) version 1.1.2 is now available.
The XRP Ledger version 1.1.2 release includes a fix for a technical issue in the consensus “preferred ledger by branch” code, which could cause a validator to fail to settle on a single preferred branch of unconfirmed ledger history. While this is not entirely unexpected and the code is designed to handle it, this issue exposed a corner case where the stringent safety guarantees of the consensus algorithm, as outlined in the recent Analysis of the XRP Ledger Consensus Protocol paper, make it difficult for the entire network to efficiently recover from this condition.
If you operate a XRP Ledger validator server, then you should upgrade to XRP Ledger version 1.1.2 as soon as possible.
Impact of Not Upgrading
If you are not running release 1.1.2 or greater, then your validator server can potentially fail to settle on a single preferred ledger branch during consensus and resort to issuing partial validations, until it can resync with the network.
For instructions on updating
rippledon supported platforms, see Installing rippled.
The SHA-256 for the rpm is:
The SHA-256 for the source rpm is:
For other platforms, please compile version 1.1.2 from source.
- Build and Run
rippledon Ubuntu Linux
- Build and run
- See https://github.com/ripple/rippled/tree/master/Builds for instructions by platform.
The first log entry should be the change setting the version:
commit 4f3a76dec00c0c7ea28e78e625c68499debbbbf3 Author: Nik Bougalis <[email protected]> Date: Thu Nov 29 21:49:10 2018 -0800 Set version to 1.1.2
Ripple plans to deploy version 1.1.2 to all XRP Ledger servers under its operational control, including private clusters, on Tuesday, 2018-12-11 at 22:00:00 UTC.
Learn, ask questions, and discuss
Bug Bounties and Responsible Disclosures
On behalf of the XRP Community, Ripple welcomes reviews of the XRP Ledger open source codebase and urge reviewers to responsibly disclose any issues that they may find. For more on Ripple’s Bug Bounty program, please visit https://ripple.com/bug-bounty/.
When compiling XRP Ledger from source, you must use a compatible version of the Boost library. As of XRP Ledger version 1.1.2, Boost 1.67.0 is required for all platforms.
1.1.2 Change Log
Improve preferred ledger calculation (#2797)
Properly bypass connection limits for cluster peers (#2795)
We welcome external contributions to the XRP Ledger codebase. Please submit a pull request with your proposed changes on the GitHub project page at https://github.com/ripple/rippled.
On behalf of the XRP Community, Ripple would like to thank those who have contributed to the development of the XRP Ledger (
rippled) open source code, whether they did so by writing code, running the software, reporting issues, discovering bugs or offering suggestions for improvements.
The following is the list of people who made code contributions, large and small, to rippled prior to the release of 1.1.2:
Aishraj Dahal, Alex Chung, Alex Dupre, Andrey Fedorov, Arthur Britto, Bob Way, Brad Chase, Brandon Wilson, Bryce Lynch, Casey Bodley, Christian Ramseier, crazyquark, David Grogan, David Schwartz, Donovan Hide, Edward Hennis, Elliot Lee, Eric Lombrozo, Evan Hubinger, Frank Cash, Howard Hinnant, Iroskam, Jack Bond-Preston, jatchili, Jcar, Jed McCaleb, Jeff Trull, Joe Loser, Johanna Griffin, Josh Juran, Justin Lynn, Keaton Okkonen, Lieefu Way, Luke Cyca, Mark Travis, Markus Teufelberger, Miguel Portilla, Mike Ellery, MJK, Nicholas Dudfield, Nikolaos D. Bougalis, Niraj Pant, Patrick Dehne, Roberto Catini, Rome Reginelli, Scott Determan, Scott Schurr, S. Matthew English, Stefan Thomas, The Gitter Badger, Ties Jan Hefting, Tim Lewkow, Tom Ritchford, Torrie Fischer, Vahe Hovhannisyan, Vinnie Falco, Warren Paul Anderson, Will, wltsmrz, Wolfgang Spraul and Yana Novikova.
As XRP Ledger progresses through the 1.0 series, we look forward to more external contributions and are excited to see the broader XRP Ledger community grow and thrive.
- Build and Run
RippleNet Surpasses 200 Customers Worldwide
Ripple, provider of leading enterprise blockchain solutions for payments, announced today that 13 new financial institutions have signed up for the company’s payment network, RippleNet. The companies include Euro Exim Bank, SendFriend, JNFX, FTCS, Ahli Bank of Kuwait, Transpaygo, BFC Bahrain, ConnectPay, GMT, WorldCom Finance, Olympia Trust Company, Pontual/USEND and Rendimento. With these additions, there are now more than 200 customers signed up for RippleNet.
JNFX, SendFriend, Transpaygo, FTCS and Euro Exim Bank will leverage the digital asset XRP to source liquidity on-demand when sending payments on behalf of their customers. Using XRP for liquidity when sending a cross-border payment helps financial institutions avoid the hassle of pre-funding accounts in destination currencies. It allows them to make faster, lower cost payments than they can through the traditional correspondent banking system.
For the financial institutions on RippleNet not currently using XRP for liquidity but interested in immediate settlement—such as CIMB or Olympia Trust Company—they are able to leverage Ripple’s technology and modern APIs for faster, lower cost and more transparent payments.
- Kaushik Punjani, Director, Euro Exim Bank: “As a leader in trade finance solutions for global corporates and fintechs, we are uniquely placed to offer new payment channels and ways to source liquidity. Our customers—whether big corporates or individual remitters—have historically been restricted from obtaining suitable funds or settling transactions in a cost efficient and timely manner. Working collaboratively with Ripple and selected counterparts, we have designed, tested and are implementing both xCurrent and xRapid in record time, and we look forward to the benefits these will bring our customers.”
- David Lighton, Founder, SendFriend: “The existing correspondent banking system is slow, inefficient and costly. SendFriend was founded at MIT with the belief that there must be a better way to send payments. We are excited to partner with Ripple to do just that. Through our partnership, we are bringing our customers a next-generation, blockchain payment solution that leverages XRP to address many of the efficiency and equity problems with existing remittances. For them, that means cheaper and faster payments.”
- Ashay Mervyn, Head of Emerging Markets, JNFX: “Payments between countries are beset with inefficiencies—inefficiencies around cost, inefficiencies around speed and inefficiencies around transparency. RippleNet is specifically geared to address these problems. For our customers who range from the largest conglomerates in Africa (with operations and commitments in over 40 countries) to individuals in villages in rural Nigeria, our decision to join RippleNet and utilize their payment solution—including XRP for on-demand liquidity—just makes sense.”
“In 2018, nearly 100 financial institutions joined RippleNet, and we’re now signing two—sometimes three—new customers per week. We also saw a 350 percent increase last year in customers sending live payments, and we’re beginning to see more customers flip the switch and leverage XRP for on-demand liquidity,” said Brad Garlinghouse, CEO of Ripple. “At the end of the day, our goal is to make sure our customers can provide excellent, efficient cross-border payments experiences for their customers, wherever they are in the world.”
RippleNet currently operates in over 40 countries across six continents. If you are interested in learning more, please visit us here.
A Global Look at the Future of Blockchain and Fintech Innovation
What does the future hold for fintech innovation overall and blockchain in particular? That question was posed to a panel of visionary leaders assembled from around the globe by Ripple’s SVP of Business & Corporate Development Kahina Van Dyke at Swell 2018 last fall.
As we step into 2019, it’s helpful to revisit their thoughts on the role of regulators, the real-world applications for blockchain underway in Africa, how to drive innovation from within large financial incumbents, and other meaningful changes already underway around the globe this year.
Importance of fintech in Africa
Tokunboh Ishmael, Chairwoman at African Venture Capital Association and Managing Director, Director and Founder of Alitheia Capital, helped jumpstart the conversation with her thoughts on fintech in Africa. As a financial service and digital computing veteran that now manages fintech investments from her offices in Lagos, Nigeria, she has had a front row seat to the evolution of fintech on the continent.
When she began investing in fintech more than 10 years ago, she said research showed 70% of the Nigerian population was excluded from the banking system. Like much of Africa, Nigerians operated on a cash basis because banks and retail institutions had become complacent serving the 1% of the population with money.
But as fintech activity and investment increased, there has been a marked shift in the country. Emerging fintechs have made it possible for Nigerians to use digital services instead of cash for payment and other basic functions. At the same time, these upstarts have spurred the incumbents to re-evaluate their business models and begin serving a wider swath of the population.
One of Ishmael’s favorite examples is a company called Paga that had 2,000 clients when she initially invested. Now, ten years later, they have nine million customers—a level nearly on par with Nigeria’s largest bank that is 100-years-old and serves 10-12 million people.
As a result of this success story and others, new research shows that the number of unbanked Nigerians has shrunk from 70% to 45% of the population.
Fintech environment in Europe
While the number of underbanked customers might be less in Europe, the continent is seeing similar levels of disruption and innovation. Ben Brabyn is Head of Level39, a fintech and cybersecurity community in London that numbers more than 200 companies and is charged with elevating both these disruptors and awareness for the technologies at large.
Brabyn attributes much of Level39’s success to the unique nature of London. As a city, he said it blends the tech environment of San Francisco, the creative community of Los Angeles, and the banking chops of New York with the political and regulatory activity of Washington D.C.
This has led to a thriving community of disruptors with deep roots in adjacent areas of expertise. The resulting level of cooperation has made for what Brabyn thinks are distinctive gains in innovation.
How to foster innovation at incumbent banks
Amy Radin is the former Chief Innovation Officer at Citi, E-Trade and a number of other leading financial brands, and the author of The Change Maker’s Playbook, a book profiling change agents in business.
When asked by Van Dyke (a former colleague) how incumbent banks can innovate from within, Radin wryly observed it’s been ten years since the collapse of Lehman Brothers and the onset of the financial crisis. She was laid off then because at the time banks associated the idea of innovation with the creation of toxic assets that contributed to the collapse.
As a result, the last ten years have been challenging for the big banks. Focused on reducing expenses and managing compliance, she says they took their eye off the innovation ball and now have to play catch up.
She pointed to the example of Citi, which downsized from 375,000 people at the time of her dismissal to a little over 200,000 now. That reduction eliminated a vast amount of institutional memory and created an outflow of talent to other companies and upstarts.
Radin says that over the last five years, these same banks have now become more attuned to innovation and opportunities. Specifically, she has seen investments in the omni-channel experience, AI, robo-advisors, blockchain and mobile.
But these banks still need help connecting user needs with business drivers. Even for fintechs she said it’s a lot of the old business models—lending, deposits—just with a “fresh coat of paint.” There is a need for new ideas and approaches like Ripple.
Radin warned the audience not to write off incumbents because just as startups don’t “own the market on innovation”—neither do incumbents “own the market on bureaucracy.”
She did later agree that big companies have a predilection towards inertia, even joking that many banks pay lots of people to stop people like her. For these big companies, the reinvention of the how often becomes more important than having a brilliant idea. In her words, they want to “engineer for predictability when you’re doing something that is highly unpredictable.”
Role of regulators and impact
As the panelists discussed the changing nature of regulators in relation to fintech, it became apparent that Europe and other parts of the world have a much more collaborative regulatory environment than the United States.
Ishmael praised regulators in Nigeria for being forward thinking and helping bring fintechs and incumbents together to create “win-win” scenarios. Brabyn even went so far as to describe the UK’s Financial Conduct Authority as the “superhero of fintech” for its support of innovation. Interestingly, he pointed to an emerging European appetite to be known as a regulatory superpower that exports standards around the world.
When asked by an audience member whether it was better to have this supportive bench of regulators or something more conservative as in the U.S., the panel replied that both are desirable to create balance. While Brabyn pointed out that tougher regulations do not deprive us of innovation, Ishmael said they can even instill a needed level of discipline.
Applications for blockchain and prospects for fintech
Van Dyke returned the panel to the topic of blockchain and asked each their thoughts on potential applications for the technology. Ishmael was passionate about its use in Africa, saying it’s not a “nice to have” but rather an essential technology for solving access.
She went further, explaining its key areas of application will be in digital identity and payments. For a continent that lacks an established identification system (think social security in the U.S.), blockchain can be transformative. By solving for identity, it can have follow-on impact and applications in areas like healthcare and education.
For payments, Ishmael pointed to regional, cross border transactions. Today, those require expensive exchanges into dollars, a costly process that stifles economic growth. Technologies like Ripple can enable growth in faster, easier regional commerce. Blockchain can also ensure the integrity of records and transactions that occur at handoff points between banks and rural transfer agents where locals deal in cash.
Radin supported the potential for blockchain on a larger, enterprise scale. She sees “cause for optimism” in the growing quorum of smart people that view potential in the technology and are experimenting with real use cases. Radin says that while it will be messy, “there will be breakthroughs.” She’s so bullish, that she says as an early stage investor she feels she should have more money in play because there is going to be a lot of value created.
Prospects for fintech innovation
Brabyn reinforced this tone of optimism but also sounded a note of caution. He is excited about what the future holds for fintech innovation, but is concerned that populism and a growing backlash against technology in general could be red flags. He said as an industry we must make the case for value in order to earn a license to operate. Without it, he’s worried we might find the ability to innovate curtailed.
Ishmael closed on an up-note though. She believes that the time for distributed ledger technology is now because we have finally become adept at explaining it and finding use cases. In five years, she thinks it’ll be integral to everything we do.
In the example of Africa, she forecast that what is known as the “Last Billion” will leapfrog the rest of the world and demonstrate how to best use these technologies.
Watch the full panel here: