Ripple CEO Brad Garlinghouse joined CNBC’s Squawk Box to talk about Facebook’s digital asset Libra.
Garlinghouse says the massive amount of attention it has garnered is a net positive for the future of finance — despite the strong rhetoric and widespread condemnation of Facebook.
“I think on the most macro level, it’s been good for the world because it’s brought a lot of attention on a set of technologies that really can’t benefit mainstream banking, mainstream consumer experiences around banking. I think there’s a little bit of, perhaps, arrogance – maybe Silicon Valley arrogance – with how Facebook approached this, and just somewhat brazenly running into some things without checking some of the boxes.”
Garlinghouse says he agrees with Treasury Secretary Steven Mnuchin, who has issued a warning about new digital assets like Libra and the dangers of unregulated currencies.
“In order for these technologies to be used well and to be taken advantage of, it has to be done in a regulatory, compliant way. We can’t expose more risk – whether it’s terrorism financing, whether it’s money laundering. These are things that, from its core, Ripple has really been focused on making sure we’re partnering with the existing system.”
When asked why he suggests that Silicon Valley arrogance is at play, Garlinghouse responds,
“I think the conversation with regulators for Facebook started some time ago, and I think they had heard loud and clear some of these reservations, and I don’t think they took the time to address some of them.”
Garlinghouse points out that Facebook’s Libra Association, a consortium of companies that will oversee the new project, has zero banks. By failing to ask legacy players to collaborate, Facebook effectively crashed the party.
“There is a huge opportunity to change the way the world financial systems work that is very beneficial to consumers, businesses, etc. But again, it’s not competing with the banks…
David Marcus came out when he announced Libra and said, ‘This spells the end of Western Union.’ That was a huge call-to-action to the banks around the world that had been watching big tech players that they’re fearful are going to come into this space.”