The Son of a Mechanic Challenging Wall Street: Ripple Founder Chris Larsen Disrupts the Financial System for the Third Time

Ripple founder Chris Larsen, a dreamer from a family of technicians. He founded E-Loan, Prosper and Ripple, disrupting the financial system three times and working to create a fairer value network. (Synopsis: Japanese gaming giant Gumi will invest 2.5 billion yen to buy $XRP: Bitcoin + Ripple two-wheel drive asset growth) (Background supplement: Ripple stablecoin enters Japan!) Ripple partners with SBI to launch $RLUSD in Q1 next year: locking in trillions of dollars in market growth dividends The check was bounced. Fifteen-year-old Chris Larsen (Chris Larsen) found that getting paid was harder than doing it itself. He runs a car dent repair business in his driveway in San Francisco. Neighbors drove up the crashed car, and he smoothed out the dents with borrowed tools and the determination characteristic of teenagers. He works honestly and at a fair price. But when customers don't pay, fifteen-year-old Larsen learns his first cruel lesson about how the financial system works. His father repaired aircraft engines at San Francisco International Airport, and his salary arrived on time every two weeks. His mother illustrates clients, but clients often pay months later, or even not. Both parents understand that money always flows easily to those who are already rich and is stingy with others. This system is designed like this. That frustration simmered for decades, driving him to create three multibillion-dollar companies. Each company has challenged sectors of the financial system that treat ordinary people as troubles rather than customers. Son of a technician who saw through the system in 1960, San Francisco. Chris Larsen was born into a family that understood the value of stable work. Growing up in a working-class family meant he experienced the financial system from the customer's point of view, not the bank's point of view. When his parents need a car loan or a mortgage, they have to deal with bank employees who make decisions behind the scenes. The process is opaque, slow and often unfair. Why do some people get loans easily and others cannot? Why do banks charge different interest rates for different customers for the same service? Why does it take so long to make a decision that can be made in minutes? These are personal troubles faced by millions of families, but few have experienced it firsthand. After graduating from high school, Larsen began studying aeronautics at San Jose State University, where he wanted to follow a pragmatic path in hopes of finding steady engineering jobs. But he felt the curriculum was too narrow. He transferred to San Francisco State University, majoring in international business and accounting. After graduating in 1984, Larsen joined Chevron (Chevron) as a financial auditor. The job took him to Brazil, Ecuador and Indonesia. His experience in global business operations has allowed him to witness first-hand the workings of the international financial system. But he needs to understand the system more deeply to change it. In 1991, Larsen received his MBA from the Stanford School of Business. His professor, Jim Collins (Jim Collins) taught him how to build companies that extend beyond the life of a founder. These experiences are deeply rooted in people's minds. Larsen isn't interested in short-term wins or funky business models. He wanted to build infrastructure that would still be important decades from now. The combination of the Internet and finance In 1996, the Internet craze was just emerging. While most entrepreneurs are busy building websites for pet supplies or grocery distribution, Larsen sees a different opportunity. What if the web were applied to the most traditional industry – mortgages? He then co-founded E-Loan with Janina Pavlovsky (Janina Pawlowski). The concept is to put mortgage applications online so borrowers can apply for loans online without having to deal with brokers who charge unnecessary fees. At the time, most financial institutions were still operating as they did in 1976, requiring borrowers to go to a bank branch in person, fill out paper forms, and wait weeks for approval decisions made within minutes by the available software. E-Loan's website, launched in 1997, allows borrowers to compare interest rates, submit applications, and track progress online. The company eliminated broker commissions, reducing processing times from weeks to days. But Larsen made a decision. E-Loan became the first company to offer free FICO credit scores to consumers. This is revolutionary. Banks and credit card companies have used these scores to decide on loans for decades, but consumers can't see their scores. The credit scoring system is a black box that determines whether you can buy a house or a car, but you don't know what's inside. This move has forced the entire credit industry towards transparency. If borrowers can see their scores, they can understand why they are being offered a particular interest rate and take steps to increase their credit worth. In 1999, the dot-com boom reached its peak and E-Loan went public. At its peak, the company was valued at about $1 billion. But Larsen isn't interested in chasing bubbles. In 2005, he sold E-Loan to Banco Popular for $300 million. E-Loan is successful because it automates the process that banks handle manually. But shouldn't we rethink how these processes work? In 2005, Larsen was already thinking about his next goal: the bank itself. What if ordinary people could borrow money directly from other ordinary people, completely free from the intervention of banks? He co-founded Prosper Marketplace with John Witchell (John Witchel), the first P2P lending platform in the United States. What is the philosophy? The borrower can post a loan request stating what he needs the money to do and the interest rate he is willing to pay. Individual investors can go through these requests and choose which loans to fund. The market will determine interest rates based on actual supply and demand rather than banks' opaque formulas. This platform has made both lenders and lenders more democratic. People with good credit can earn higher returns than savings accounts. People with imperfect credit can get loans that traditional banks won't provide. But Prosper faces a problem that E-Loan has not encountered: regulatory uncertainty. When the securities law was enacted decades ago, no one imagined that ordinary people would lend money to strangers online. In 2008, the U.S. Securities and Exchange Commission (SEC) ruled that P2P loans were actually securities that required registration and disclosure. Many companies may choose to confront regulators or look for loopholes. Larsen chose a different path. He did not confront the authorities, but cooperated with them. Prosper filed a prospectus with the SEC and adjusted its business model to comply with securities laws. This has allowed the company to survive regulatory challenges and continue to grow. Because it's not enough to build better technology. You must also help regulators understand why new rules are needed. In 2012, Larsen stepped down as CEO of Prosper, but remains chairman. He is already thinking about his next project. P2P showed him that technology can replace the intermediary role of traditional finance. But the real ambition is not domestic borrowing. It's about international payments. Building a Value Network The idea for Ripple (Ripple) stemmed from a simple observation: sending money across borders is still more difficult than sending email. International wire transfers take several days, are expensive, and often fail for unknown reasons. In information can be milliseconds...