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Chris Larsen is stepping down as chief executive of distributed ledger pioneer Ripple at a watershed moment in the development of the company he cofounded in 2012. The past year saw some good milestones being passed in terms of paying customers signing up and collaborative ventures established, but the company now has to keep up the momentum is has built while making the transition from start-up to grown-up.

Now for the hard part: taking Ripple to the next level

A change in management at Ripple comes as the company starts to move from being a well-funded Silicon Valley start-up to being a serious player in the transformation of the world's financial infrastructure. At the beginning of January 2017, cofounder Chris Larsen will become executive chairman and hand over the chief executive position to Brad Garlinghouse, who has been chief operating officer since joining the company 18 months ago.

Garlinghouse takes the helm at a time when the company faces a whole new set of challenges that Larsen might not have been the best person to navigate through – at the very least, Larsen moving to one side reduces the chance of "founder's syndrome" preventing the company taking the necessary changes to address those challenges.

Under Larsen, Ripple has certainly carved out a place for itself in the blockchain/distributed ledger stack: Ripple now claims 15 of the top 50 banks as paying customers, and some of those are also investors in its recent $55m funding round, while names such as Bank of America Merrill Lynch, Santander, UniCredit, Standard Chartered, Westpac, and Royal Bank of Canada are supporting its Global Payments Steering Group, and its joint venture with SBI has the support of 42 Japanese banks.

So support is strong – but there's still a lot of jostling for position to get through before the dust settles, and Garlinghouse will have to take the next steps through a complex web of alliances, collaborations, and competing initiatives with the likes of the Linux Foundation's Hyperledger Project and the Swift interbank messaging network.

One of the big challenges is that there are a lot of people in the transaction banking and payments world, in banks and infrastructures, that would be delighted to see Ripple and the other ledger technology initiatives fail – in no small part because of its stated ambition to modernize the global financial payments infrastructure.

Does that mean replacing, or (more feasibly) becoming a key component of, an infrastructure like the Swift network? Larsen has always indicated that Ripple is open to working with Swift – and that sentiment has been reciprocated at high levels in Swift (itself an organization plenty of people harbor grudges against).

Perhaps an indication of the diplomatic skills Garlinghouse is going to need came at Swift's recent Sibos event, where Ripple had a big presence that drew a lot of comment, not least because during the event it posted critical remarks about Swift's Global Payments Innovation initiative – ending with a tweet responding to media comments on its activities: "Rude? We think it's quite friendly of us to educate the world's banks on the limitations/weaknesses of #SWIFTGPI!"



David Bannister, Principal Analyst, Financial Services Technology

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