Karl-theodor zu guttenberg joins ripple labs advisory board ripple

Ripple Labs is thrilled to announce that Karl-Theodor zu Guttenberg is joining the advisory board. Mr. zu Guttenberg is the Chairman and a Founder of Spitzberg Partners LLC, a New York-based boutique corporate advisory and investment firm that provides strategic counsel and investment insights on European and international political, economic, diplomatic, technology, and security issues.

He served as Minister of Economics and Technology and then as Minister of Defense in the cabinet of German Chancellor Angela Merkel. As the youngest Defense Minister in German history, he led the most significant structural reform of the German armed forces since the Bundeswehr’s founding.

During his time in office, Minister zu Guttenberg was Germany’s most popular politician.

Mr. zu Guttenberg is a Distinguished Statesman at the Center for Strategic and International Studies (CSIS) in Washington, DC and serves as Senior Advisor to the European Commission leadership on global Internet freedom. He sits on a variety of international corporate and not-for-profit boards, has published numerous op-eds and articles, and holds a law degree from the University of Bayreuth. He currently lives with his wife and two daughters in Greenwich, CT.

I am a European global citizen with Bavarian-German roots, currently living in the New York area. After an inspiring and turbulent 10 years in high-level politics with all the ups and downs, I gladly returned to the private sector enjoying a “free” life and the opportunity to gain deeper knowledge of the most pressing issues for the next generation.

Our core mission is to help technology and financial services companies invest and expand their business in major European and emerging markets. We have a unique background in high-level government positions and an excellent team with specialists in new technologies and financial markets. We provide our clients with critical insights into political and regulatory developments affecting their corporate strategy and competitive positioning. We also help select European companies take advantage of trade and investment opportunities in the US and Canada.

Our vision for Spitzberg Partners is to be the leading boutique advisory firm with an in-depth understanding of how key players in the public and private sector are now working to protect their interests in a world that is shifting from government to “Googlement”—driven by the unprecedented ability of companies to gather, store, and evaluate vast amounts of (personal) data.

There is no question that cryptocurrency and the associated infrastructure—specifically the Ripple protocol—represents a dramatic step forward that cannot be ignored. Put another way—this technology cannot be un-invented or have the genie put back in the bottle. Even more important is Ripple Lab’s approach and potential to redefine the environment of (international) financial transactions.

This space has historically been difficult to navigate from an entrepreneurial or innovation perspective. There are so many factors at play: whether it’s entrenched players, politics and regulation, or simply the operational risks of dealing with money. But there is this sense that real change could be coming. What’s different today than say 10 or even 20 or 30 years ago?

This is an interesting question because it is important to understand some key differences between innovations in the financial sector as opposed to emerging tech in other fields such as cloud computing, robotics, social media, etc. While people are willing to accept growing pains with certain new technologies, financial products and transactions have no margin of error. In a sense, I think that the unique challenges faced by financial innovators mirror those seeking to disrupt healthcare.

Despite these challenges, we are riding a wave of innovation that will fundamentally change many elements of our lives. It is impacting the entire world in one form or another. The Ripple protocol, Bitcoin, and general innovation in finance are key parts of this movement—and as such, I believe that it reaps the benefits of the credibility that earlier innovations have built. Financial innovation will be ignored at your own peril.

One set of challenges that I am primarily interested in relates to political and regulatory affairs. While Bitcoin gained its initial popularity as a pet-project for anarchists, it is my belief that we have moved beyond cryptocurrencies being used as a way to withdrawal from the global financial system. Therefore, it will be regulated in some form. We see already the first, uncoordinated steps, specifically in Europe.

A final challenge among all participants in the ecosystem will be to effectively manage consumer expectations. All of the publicity around cryptocurrency is creating the impression that it is more developed than it is. Likewise, episodes like MtGox garner widespread negative publicity, harming the credibility of the industry, even of other products than just the currency. People need to realize that there will be some hiccups along the way—like any new technology, and understand the risks that they face.

They are happy to keep their money and the bank and buy things with their credit cards. Very rarely must they worry about international money transfers. Along those lines, much of what happens regarding the exchange of value is abstract, working invisibly in the background. Why should your typical consumer care? Why is this important to them and how will they benefit?

This is an excellent question, and it is one that I do not think can be fully answered today. Some initial thoughts: Once merchant adoption becomes more widespread consumers may expect to find a reduction of prices equivalent to a tax cut up to 3 percent—the fees typically charged by banks. This could substantially increase commerce globally, which is critical to continuing our fragile economic recovery.

Widespread adoption of Ripple will also provide a welcome boost to global development, as multibillion dollar remittance transfers will be conducted at a fraction of their current cost. The current remittance market is over $410 billion a year and according to the World Bank is expected to grow to over half a trillion dollars by 2016. Both immigrant communities and their countries of origin stand to benefit from Ripple’s disruptive technology. The news last month that Astropay in Latin America will open licensed gateways in seven different countries so people can send remittances is very exciting.

However, the reason that I cannot fully answer this question is because nobody yet knows what these innovations will ultimately manifest themselves as. While we are already thinking about crypto’s applications beyond the financial system, nobody knows what the world will look like in 5-10 years. This is what makes the technology so exciting.

However, it remains to be seen when the “establishment banks” will adopt this approach. Primary hurdles are regulatory concerns and price volatility. However, if consumer demand for new transaction models increases, these firms will need to accommodate their clients. Those who are willing to participate will certainly aim to capitalize on first mover advantages.

Regarding the rest of the team, I believe that Ripple Labs hosts one of the most dynamic and talented groups of individuals that I have met. Further, I was encouraged by CTO Stefan Thomas’ willingness to audit multiple Bitcoin exchanges this year. This demonstrated to me both his and the company’s interest in being a responsible steward for the ecosystem as a whole.

Addressing the technology, I believe that the Ripple protocol not only addresses a key hurdle currently facing Bitcoin transactions—speed—but its protocol is interoperable with any digital currency, fiat currency, or other item. This flexibility, combined with the Ripple protocol’s scalability, makes the possibilities for its technology virtually unlimited.