Caitlin Lengthy, founder and CEO of Custodia Financial institution, delivered one of many harshest assessments but of Ripple and the XRP ecosystem in a latest episode of the Gold Goats ‘n Weapons podcast, calling into query the challenge’s credibility, tokenomics, and long-term viability in institutional finance. In a sweeping critique, Lengthy acknowledged bluntly: “It’s not going to take over. If it had been going to take over, it could have taken over a very long time in the past.”
Caitlin Lengthy Slams Ripple And XRP
The dialog started with a reference to rising hypothesis that Ripple is perhaps among the many blockchain networks “blessed” by regulators to deal with tokenized monetary infrastructure. However Lengthy pushed again arduous on that narrative, saying the concept “overstates how vital that community is.”
Based on Lengthy, the core challenge lies in Ripple’s structural legacy. “The banks have at all times been suspicious of it,” she stated, citing what she described because the challenge’s centralized structure and flawed tokenomics. “It’s a centralized community and the tokenomics are backwards.” She argued that the XRP provide mannequin — rooted in an enormous pre-mine and upfront fundraising — has completely broken institutional belief. “The individuals who extracted cash up entrance are by no means going to be trusted as a result of everyone goes to look and assume that something they do is an exit rip-off to attempt to dump on retail.”
For Lengthy, the distinction with Bitcoin and Ethereum is stark. “The simplest tokenization platforms are those the place there was no cash up entrance or little or no cash up entrance,” she defined. “That’s Bitcoin and Ethereum.”
Lengthy additionally interpreted Ripple’s latest pivot — with the corporate now launching its personal regulated stablecoin — as a tacit admission of failure. “As a substitute of making an attempt to promote that into the banking business, they’re getting their very own regulated monetary establishments and making an attempt to challenge a stablecoin,” she stated. “That’s type of, in some methods, an admission that the bottom layer blockchain didn’t get the adoption they had been in search of.”
Her feedback come amid Ripple’s continued push into institutional markets, together with efforts to acquire a US financial institution constitution and launch a US greenback stablecoin. Whereas these strikes have been celebrated in some circles as indicators of maturity and strategic adaptation, Lengthy framed them as a fallback, noting that the unique promise — to develop into a foundational layer for interbank settlement — had clearly not materialized. “The bottom layer community will not be going to develop into the bottom layer of changing SWIFT,” she stated.
She additionally pointed to the authorized and regulatory drag Ripple confronted over the previous a number of years, together with the SEC’s long-running lawsuit towards the corporate for allegedly conducting an unregistered securities providing. “That hamstrung them,” she stated, whereas acknowledging that Ripple wasn’t alone in struggling underneath the Biden administration’s broader crackdown on crypto: “It didn’t damage Ripple as a lot because the Fed damage us… All people who was focused by the Biden administration was damage to various levels.”
When requested what community the US Treasury is most definitely to decide on for tokenizing US Treasuries, Lengthy was unequivocal: “They’re not going to make use of Ripple. They’re going to make use of Ethereum. They might use Bitcoin, however the Bitcoin layer twos aren’t mature sufficient for one thing like that.” She cited Ethereum’s technical maturity and infrastructure readiness because the decisive elements.
XRP Group Reacts
The backlash from the XRP group was swift and livid. Outstanding group determine Crypto Eri known as the remarks “ugly tribalism,” accusing Lengthy of conflating Ripple with the XRP Ledger, and failing to differentiate between a centralized firm and a decentralized protocol. “Your entire blockchain group needs to be deeply upset,” she wrote.
Digital Asset Investor, one other well-known XRP supporter, tagged Ripple executives immediately, suggesting the corporate was nonetheless on monitor to realize regulatory breakthroughs. Ashley Prosper went even additional, alleging that Lengthy’s criticism might stem from frustration over Custodia Financial institution’s lack of a Federal Reserve grasp account: “Appears like Caitlin Lengthy is mad that Ripple will get their Fed grasp account earlier than Custodia Financial institution.”
However Lengthy’s criticism was not offhanded nor informal — it was pointed and rooted in her long-standing perspective on what makes blockchain infrastructure bank-grade. For her, belief, decentralization, and long-term neutrality are stipulations — and XRP, in her view, fails on all three.
“Ripple’s been at this longer than nearly anyone else and so they haven’t made lots of progress,” Lengthy concluded. “It’s actually that easy.”
At press time, XRP traded at $2.94.
Featured picture created with DALL.E, chart from TradingView.com
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