Ripple CEO Brad Garlinghouse, in a recent CNBC interview at DC Fintech Week, expressed unwavering optimism about the future of cryptocurrency regulation in the U.S., regardless of the election outcome. He anticipates a significantly more pro-crypto and pro-innovation Congress post-election, fueled by a perceived “reset” of the current administration’s approach. This follows a landmark legal victory for Ripple last year, where a judge ruled that XRP, Ripple’s associated token, is not a security when sold to retail investors on exchanges. This positive outlook contrasts sharply with his previous skepticism and underscores a significant shift in the industry’s sentiment as the election approaches.
Key Takeaways: A Post-Election Crypto Resurgence?
- Ripple CEO Brad Garlinghouse predicts a more pro-crypto Congress regardless of the election outcome.
- He anticipates a “reset” from the current administration’s perceived hostile stance toward crypto, citing “Operation Chokepoint 2.0” as an example.
- Garlinghouse advises fintech startups to incorporate outside the U.S. due to the current regulatory climate.
- Ripple’s legal victory against the SEC, establishing XRP is not a security in certain contexts, fuels this optimism.
- Despite not endorsing candidates directly, he recently endorsed an attorney running against Senator Elizabeth Warren, known for her critical stance on crypto.
An Impending “Reset” in Crypto Regulation
Garlinghouse’s optimism stems from a perceived shift in the political landscape. While acknowledging the contrasting approaches of the different presidential campaigns, he believes that a more pro-crypto Congress is inevitable. He points to significant political donations from Ripple and its co-founder, Chris Larsen, as indicative of the industry’s increasing political engagement. He notes Trump’s openly pro-crypto stance contrasted with a more nuanced approach from the Harris campaign – while emphasizing that he believes a major shift is certain regardless of who wins the presidency.
The Biden Administration’s Stance and Operation Chokepoint 2.0
Garlinghouse explicitly criticizes the Biden administration’s approach to crypto, labeling it an “attack” not solely by the SEC. He cites the involvement of the OCC and Treasury as further evidence of a hostile regulatory environment. He highlights the increasing unwillingness of banks to work with crypto businesses, a phenomenon he equates to “Operation Chokepoint 2.0.” This term refers to a previous initiative that discouraged banks from serving businesses deemed risky, which many believe is now being replicated to target the crypto industry. This “hostile administration,” he predicts will be replaced by a more favorable regulatory environment after the upcoming election.
Political Endorsements and the Future of Crypto Regulation
While Garlinghouse avoids direct endorsements of presidential candidates, his recent public support for John Deaton, an attorney challenging Senator Elizabeth Warren, reveals a preference for candidates with a more supportive outlook on crypto. Senator Warren is known for her calls for increased regulatory scrutiny of the crypto industry, furthering making Garlinghouse’s strategic opposition clear. The election, therefore, is seen as a pivotal moment for shaping the future relationship between the cryptocurrency industry and the U.S. Government.
Ripple’s Strategic Positioning and Global Growth
Ripple’s activities reflect its CEO’s views. Approximately 95% of Ripple’s business operates outside the U.S, a testament to his expressed concerns about the domestic regulatory environment. This speaks to a strategic decision to shift focus to regions with more welcoming regulatory approaches.
Advice for Fintech Startups: Look Beyond the U.S.
Garlinghouse’s advice to fintech startups is stark: “Incorporate outside the United States.” This reflects the challenges faced by businesses within the U.S. crypto landscape, encouraging businesses to find friendlier regulatory environments abroad. The suggestion underlines the current regulatory uncertainty and the potential for significant future changes, making the current situation incredibly challenging for many.
Assessing the Long-Term Outlook: A Speed Bump or a Roadblock?
Despite the current difficulties, Garlinghouse’s long-term outlook is overwhelmingly positive. He believes that the present difficulties are merely a “speed bump” in the industry’s growth trajectory. He asserts that anyone who doesn’t believe in this positive future outcome simply “isn’t paying attention.” He predicts that, in 10 years, the current policy will be viewed as a significant error by the United States – a temporary setback rather than a long-term hinderance to cryptocurrencies.
The Impact of the Ripple Victory on Industry Sentiment
The recent Ripple judgment plays a significant role in Garlinghouse’s outlook. The court’s decision that **XRP is not a security when sold on public exchanges** injected a significant dose of optimism into the market. This legal victory, though specific to Ripple and XRP, represents a symbolic success that strengthens confidence in how the future of crypto regulation will unfold after the upcoming election.
In conclusion, the upcoming election is viewed by Ripple and its CEO as a catalyst for change. While there are challenges and uncertainties, the sentiment within the organization remains upbeat. The combination of political lobbying, legal victories, and a global strategic expansion demonstrates a proactive approach to navigating the complexities of the U.S. regulatory environment. Ultimately, Garlinghouse makes it clear that whatever happens in this election, the future of cryptocurrency remains as bright as ever.
