When cryptocurrency meets the banking sector: Blockchain technology can be leveraged to rewire the global financial infrastructure and simplify transactions between financial institutions, argues Ripple CEO Brad Garlinghouse in this Vox podcast (listen, runtime: 61:32). Ripple sells financial institutions a cryptocurrency called the XRP ledger, which enables direct cross-border payments to be made without relying on pre-funded payments being made in the corresponding currencies (in what is known as “correspondent banking”). This, he says, benefits the population most penalized by the current system, who are liable for cross-border remittance costs averaging 6%. Perhaps surprisingly, it is also welcomed by many large financial institutions, partly because it may in time open up access to bns of unbanked people — and partly because it creates a more level playing field within a system currently controlled by a small number of global banks.

Regulation is key: Garlinghouse spends a lot of time meeting with financial regulators, dispelling myths about crypto and assuring them that Ripple-enabled technologies are regulation-compliant. He believes that banks will continue to apply an important regulatory framework for the industry, and views the ideal future scenario as being one in which the technology enables the banks to grow their businesses, and the banks help to regulate it. “We can reduce the friction of global commerce, we can allow people globally more access to the economies around the world to compete. I think that’s actually a really good thing,” he says.