Full Recap: Here’s What Ripple CEO Revealed at the Latest U.S. Senate Testimony

Brad Garlinghouse, the CEO of Ripple, testified before the U.S. Senate Banking Committee at its first hearing on crypto market structure legislation. The hearing , which took place yesterday at 10:15 a.m. (ET), saw Garlinghouse and other crypto stakeholders, such as Summer Mersinger of the Blockchain Association and Dan Robinson of Paradigm, testify before Congress. For context, the hearing focused on market structure legislation, which aims to provide regulatory clarity and end the longstanding confusion over which tokens constitute securities or commodities. Garlinghouse Remarks During the hearing, Garlinghouse provided a comprehensive overview of Ripple's operations, XRP’s functions, and why U.S. lawmakers should enact clear legislation for the industry. Ripple’s Operations He began by introducing himself as the CEO of Ripple, a company with over 900 employees across 15 global offices. Garlinghouse emphasized that Ripple was launched over a decade ago with the aim of “enabling the internet of value, a world where money moves like information does today.” According to him, Ripple builds software products for custody, stablecoins, and cross-border payments. Through these products, Ripple has helped financial institutions serve their customers better by speeding up and lowering the cost of money transfers. “These are not abstract concepts. We work every day with banks that rely on our technology to deliver real results in the global economy,” Garlinghouse said. XRP Functionalities Notably, Garlinghouse emphasized that the XRP Ledger (XRPL) is the technology that powers Ripple’s software products. He stated that Ripple leverages the XRPL and its native token, XRP, for facilitating cross-border payments. He described XRP as a token designed to enable low-cost, fast, and highly scalable transactions. Ripple Compliance-First Approach Garlinghouse also highlighted Ripple’s compliance-first approach, noting that the company has worked with global policymakers since day one. This commitment has led to Ripple obtaining over 60 licenses from regulators in the United States and abroad. These licenses cover various sectors, including payments, money transmission, and crypto operations. Core Principles of Smart Legislation Addressing the main topic of the hearing, Garlinghouse outlined what he considers the core principles of smart legislation. In his view, such legislation should focus on protecting consumers from scams and fraud, establishing proper market oversight, holding bad actors accountable, and fostering innovation. He believes that establishing a framework for digital assets and stablecoins that meets these objectives will broaden access to financial markets, generate jobs, strengthen the economy, and position the U.S. as a global leader in blockchain and cryptocurrency. Ripple Victimized By Lack of Clear Rules Furthermore, Garlinghouse reflected on how the lack of clear rules has hindered the U.S. crypto industry from making meaningful progress. He stated that Ripple experienced firsthand how regulatory uncertainty can be weaponized against good actors. He acknowledged that Ripple was the first leading U.S. crypto company to be sued by the SEC. The lawsuit, filed in December 2020, alleged that Ripple violated securities laws through its offering and sale of XRP. According to Garlinghouse, Ripple and other crypto companies understood that losing the lawsuit could have been a “death knell” for the U.S. crypto industry. This motivated Ripple to defend itself. After a four-year legal battle, Ripple “won in everything” that mattered. “Our victory cleared the path for other market participants to fight back,” he asserted. For context, a federal court ruled that XRP is not a security in itself. The court also found that XRP sales on digital exchanges did not constitute investment contracts. However, it determined that certain institutional sales did violate securities laws. Although both parties initially appealed the verdict, they have since agreed to drop the lawsuits and end the multi-year legal dispute. Notably, Garlinghouse said Ripple has been engaging with policymakers despite the headwinds to ensure the industry gets the much-needed clarity. Need for Smart Legislation Furthermore, the Ripple CEO emphasized the need for principled and smart legislation. He outlined three legislative priorities that Congress should consider when passing effective legislation. First, Garlinghouse recommended that Congress set clear jurisdictional boundaries for U.S. financial regulators, such as the CFTC and the SEC. Second, he opined that policymakers should prioritize establishing pathways for companies to build without compromising investor protections. Lastly, Garlinghouse said Congress should pass smart legislation that guarantees America's leadership in the crypto sector. He suggested that the U.S. could establish its leadership by leveraging the benefits and efficiencies of digital assets. Why the US Deserves to be the Leader of Crypto With over 55 Americans currently participating in the crypto economy, Garlinghouse stressed that the U.S. should be the undisputed leader of the industry. He stated that the U.S. is home to the deepest capital markets and a spirit of innovation that has driven the nation since its inception. He concluded by urging the Banking Committee and the full Senate to pass market structure legislation that would establish clear rules and solidify America’s leadership in the sector. “Once market structure legislation for digital assets becomes law in the U.S., it will catalyze a new era of U.S. competitiveness and unlock efficiencies in financial transactions—dramatically helping consumers and businesses alike,” he asserted.