Ripple CEO Speaks at Singapore Fintech Festival
Ripple CEO, Brad Garlinghouse, sat down with the IMF Deputy General Counsel, Ross Leckow, for a fireside chat at the Singapore Fintech Festival.
The two discussed the opportunities presented by blockchain and digital asset technology for financial institutions in ASEAN. Both agreed upon the fact that it is going to change the world of global payments.
Also Read: Ripple Discusses Digital Asset Adoption
Ripple covered the conversation in a recent Ripple Insights article. Starting with the first question addressed to Leckow by Garlinghouse:
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.
Last 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.
Moving on to Leckow’s question and Garlinghouse’s answer to it:
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.
The next question is:
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.