Fortune’s Jeff Roberts interviewed Ripple’s CTO, David Schwartz, earlier this month on June 12th during the Future of Fintech conference in NYC. It was fascinating, and in this article, we give you some of the highlights.


It all started with a very concise explanation from Mr. Schwartz about what Ripple is. It’s a fintech company which wants to help financial institutions all over the world to eliminate friction from the settlement of international payments.

He started by explaining that the current standard system for international payments (SWIFT) predates the digital era. It’s mostly just a messaging system that announces a payment is going on its way but can’t tell you the path it will follow, the fees it will charge, or even if the target account exists.

In fact, according to Mr. Schwartz, Ripple found that the “plumbing” in the system was so outdated that just coming up with a better messaging system (let alone using blockchains or cryptocurrencies) improves things very much indeed. That’s why Ripple developed xCurrent, one of its software platforms, which is indeed basically just a messaging system that, nevertheless, is way more advanced than SWIFT.

The next question was, why is Ripple’s XRP needed to solve this problem? Mr. Schwartz started by recognizing that it’s a good question. He said that Ripple has been struggling to persuade banks to adopt XRP because they’re usually very conservative institutions that prefer to move slowly.

He continued by saying that Ripple also has noted that the non-banking payment industry (remittance services) are so much more aggressive and willing to move forward. They like to save time, money, and costs for themselves and their customers.

Next, he explained how volatility favors the use of cryptocurrencies instead of fiat currencies. Digital assets are infamously highly volatile. Prices change all the time, and they can do so in dramatic ways. Fiat currencies are very stable by comparison, but they remain volatile up to a certain point. That’s where transfer times make all the difference.

Let’s say you want to transfer USD to MXN (Mexican Pesos). If you do in in the standard way, it will take a few days. And the USD/MXN trading pair is volatile as Forex pairs go, so during those few days it will take to complete the operation, the very low volatility in the Forex market could be enough to show you its teeth.

If you carry out this transference using XRP, on the other hand, it will take two seconds. And two seconds is a short enough period that even the high volatility in digital coins will not affect you in any way. This is the problem that xRapid solves.

And on top of that, there’s an additional advantage: xRapid transfers do not need pre-funding, which means that institutions using xRapid don’t need to have frozen capital just waiting around until it’s required to complete an international transfer.

XRP is an open market place, that’s made it easier for Ripple to find partners because it’s cheap and available. So any institution who wants to participate can do so without problems.

Success story

When asked to give a success story, Mr. Schwartz talked about how a capital flow in and out of China, trading on the Yuan, formed organically during XRP’s early days. It had nothing to do with institutions (Ripple included).

There were enough people around the world interested in moving money in and out from China that they found each other and did it using XRP as a mediating coin. It had high trade volumes and high liquidity. The XRP ledger includes a built-in decentralized exchange, and that’s what did the trick. That exchange became the market place needed.


The next subject was about stablecoins. Those are cryptocurrencies that are backed by some physical asset, most often a fiat currency. Mr. Schwartz said that stablecoins are a helpful thing because they help to protect investors against volatility if you can trust the issuer.

But you still need enough liquidity for the coins to be useful. But if the market sees a flood of different stablecoins, then it will not be convenient or efficient for anybody. In that scenario, XRP would help a lot because it’s neutral and open.

Facebook’s Libra

Then they talked about the elephant in the room: Facebook’s prospective cryptocurrency. Ripple’s CTO started by saying that Facebook has something of a trust debt to the public, and they will have to fix that problem before they can “credibly enter the space.” He further explained that money (which Facebook has abundantly) doesn’t buy you credibility.

That needs neutrality and reputation. While Facebook hasn’t published all the details about Libra, Mr. Schwartz considers that it looks like it’s going to be a collateralized asset. That means that it won’t be open because in that kind of market he who owns the collateral also makes the rules. And that’s beside the point in crypto, where nobody is supposed to come up with impositive regulations of any kind. He concluded by saying, “we’ll see when they publish.”

The other elephant in the room came next, which is Ripple’s issues with centralization. The CTO explained that while Ripple holds a vast amount of XRP tokens, the XRP ledger is indeed decentralized and Ripple has no legal right to control it in any way. It couldn’t if it wanted because there are very many validators in the network. It’s very democratic.

He then explained that Ripple needs and wants its competitors to succeed, as well. That’s how a cryptocurrency-based ecosystem can spread around the world and create the space in which Ripple and XRP can succeed as well. So the crypto verse is something of a ship in which everybody will make it or sink, and Ripple can’t build such ecosystem singlehandedly.

When talking about the cryptocurrency market erratic behavior, Mr. Schwartz said that the price in any digital asset is tough to understand indeed. Nobody understands what’s really going on. Mr. Schwartz likes to think that there’s a shift happening from pure speculation to utility, but he recognizes that he’s probably kidding himself on that regard, at least for the time being.

The conversation followed with Mr. Schwartz saying that SEC has so far failed to provide clear regulations for the crypto verse. First, they kind of green-lighted Bitcoin and Ethereum but then the agency recanted. He said that Ripple has been exceedingly transparent with all they do, but that SEC’s lack of progress in this regard puts Ripple in an awkward position. Regulatory uncertainty remains among the main obstacles to develop the digital asset economy.

Micropayments will be huge in Mr. Schwartz’ view. They will take over the world very much as the internet did. If that technology comes true, then you need nothing else to make even bigger payments. He proceeded to explain how web monetization currently works.

The conversation finished by playing the “overrated/underrated” game. In Mr. Schwartz’s view, Facebook, Bitcoin (qualified) is overrated; Ethereum, Ripple are on the underrated side.

It was a very illustrative interview which we encourage you to see in full because it can help you to understand a lot about Ripple for sure, but also about the cryptocurrency environment in general.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication ( holds any responsibility for your financial loss.

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