ABA Banking Journal - November/December 2016 - 23
A conversation with Ripple's Chris Larsen
BY MONICA C. MEINERT
n the 1900s, the international shipping industry was
drastically different than what we know today. It was
labor intensive, inefficient and lacked a universal
standard-shipping methods and product packaging
varied widely by country. Shipping anything around
the world was a costly and time-consuming process. That
is, until entrepreneur Malcolm P. McLean invented the
shipping container in 1956.
Banks are actually really
well-positioned because they are
probably the best organizations in
the world at reconciling the three
domains of the internet of value:
McLean's idea was to create a standard-sized shipping
trailer that could be easily loaded and unloaded from
cargo ships and transported on land via truck. The
invention revolutionized the industry-in the 20 years
after the shipping container was introduced, global trade
exploded by more than 700 percent.
"Right now, we live in a 'pre-shipping container' global
financial system," explains Chris Larsen, CEO of Ripple,
a global financial settlement solutions company. "We
have a series of silo networks that don't talk to each other.
Correspondent banking tries to create interoperability, but
it's a clunky and antiquated system that doesn't solve the
problems we have today."
If global payments go the way of the shipping industry, it
would follow that some innovation would come along that
could standardize and modernize the payments process.
And if you've opened any financial newspaper recently,
you're likely to find people asking that very question about
So is blockchain the "shipping container" for global
aba.com/BankingJournal | ABA BANKING JOURNAL