Ripple Labs has found itself at the centre of two of the hottest topics in crypto lately: regulation and company culture.
Ripple has publicly implemented what it calls a “no a***holes” policy, in an attempt to single its culture out among its peers, many of whom have attracted criticism for how they treat their staff.
At a Barron’s Live event examining the state of the industry right now, Financial News caught up with Sendi Young, Ripple’s head of Europe, to find out more about the company’s approach to both subjects.
Our discussion came amid ongoing regulatory uncertainty in both the US and the UK. Companies operating in Europe look set to enjoy a clearer set of guidelines from the EU’s Markets in Crypto Assets bill, but still face a two-year implementation period.
Against this backdrop, Young struck a positive tone for the future of the sector — but said companies wanted more clarity on what rules they would be dealing with.
The global regulatory landscape for crypto has moved fast this year. What needs to happen next?
What really matters is having a clear regulatory framework on this so that all the players know the rules of the road and can innovate accordingly. Uncertainty is the biggest threat to innovation. We are not against regulation. Regulation will help crypto unlock utility.
I have the opportunity to see what’s happening in the UK and Europe compared to the US and Asia. I can kind of see the differences. We have outright bans like in China, we have regulation by enforcement in the US, and we have something in between in places like the UK, Europe, Japan, Singapore, UAE, where it is more about creating that framework so that the players can innovate. That third one is certainly the approach that we favour.
The Markets in Crypto Assets bill, which is the new legislation that the European Union just passed and is looking to take effect in the next few years, is very important. It is a pivotal moment and it is the first harmonised regulatory framework for such a big region that we have seen.
We applaud that effort. That will really help innovation and help Europe take a step forward to being a crypto hub globally.
There is currently some competition around whether the SEC or the Commodities Futures Trading Commission should regulate crypto in the US. Which organisation would you pick?
I’m not in a position to say who’s better positioned and who would be favourable. But there are a few things that really make for good policy.
One of them is public-private cooperation. In the UK, for example, we recently had crypto sprints where the regulator invited the industry to present their views on what regulation could and should look like and what they should watch out for.
That is a really good approach to understand and consider all the nuances before coming up with something. Another thing that makes good regulation is clear taxonomy around digital assets. Again, I’m not suggesting it should be one way or another, but just having clarity and knowing what you are dealing with is the most important thing in business.
The major cryptocurrencies are still way down after the crash earlier this year. What’s next for the market?
Obviously the crypto market has been challenging, but it is not just crypto. The broader macroeconomic environment is one of the most challenging in the last few decades. And in the last year, the crypto markets have been more correlated to the stock market. So it is obviously very hard to know if we have reached the bottom.
But in a way, it doesn’t matter. Of course, if you invest in the market it does, but the most exciting part of this industry is the fundamental shift in technology, in the underlying infrastructure that means we can change how value is moved around the world. It is not just money. I definitely see a world where, increasingly, everything we have will be tokenised, from your art to your digital photos. Moving that across the world will be more and more important.
Our lives have changed a lot in the last 10 years or so. Everything is on demand. Everything is global. Everything you want to have at the click of your fingers. But the way we interact with the internet and money and value has not really kept up pace.
You might get very disappointed when you see all this news about the crash, but equally there is a decent amount of funding being raised for projects that are creating utility. The companies who are focused on building for the long term are still building. And companies like us are still hiring. So it is important to also have a balanced view. The hype is only hype. The important thing is what we are building, whether we are solving real world problems, and whether we are making a fundamental change in the world.
Ripple has a “no a***holes” policy on hiring, and has looked to set itself apart from its peers who have attracted criticism for the way they treat their workers. Does the crypto sector have a culture problem?
There are some challenges that I have picked up on that are causing problems. One is a lack of transparency. The second problem is crypto bros. And it is real, unfortunately. With crypto being at this intersection of financial services and technology, which are both typically white male dominated industries, there is a real threat that we could repeat the same mistakes as in those industries.
We see that, both in terms of our anecdotal experiences at conferences and in our recruitment efforts. A Forex study recently showed that of the 32 biggest crypto companies in the world, all of the CEOs are male, and in the top eight to 10 crypto companies in their boards there is not even one female. Contrast that to Ripple — of our nine board members we have four females, and other ethnicities represented as well.
Is the male-dominated nature of the industry part of why there are issues?
It is not just that, and it is not a binary thing. But for me, something to watch out for is that we have seen a massive influx of talent coming into crypto from some of the leading tech companies, leading financial services companies. I personally came from MasterCard.
By nature, if you get talent from there, there is already a lower representation of minority groups and genders. So we need to work extra hard to make sure that as the industry is in the early stages, the people working in it represent the people we are trying to serve.
At the end of the day, one of the underlying premises of the blockchain and crypto technology is improving access to financial services and the financial system, where today two billion people are left out of that ecosystem, which is very antiquated, created in the pre-internet era and does not serve the needs of a lot of people on this planet.
To contact the author of this story with feedback or news, email Alex Daniel