Chris Larsen: The Pioneer of Restructuring Cross-Border Payments

Written by: Thejaswini M A

Compiled by: Block unicorn

Preface

The check was returned.

Fifteen-year-old Chris Larson discovered that getting paid was harder than doing the work itself.

He runs a car dent repair business in his own driveway in San Francisco. Neighbors bring over their damaged cars, and he uses borrowed tools and the determination unique to teenagers to knock the dents out.

He works honestly, and the prices are fair. But when clients don’t pay, fifteen-year-old Larson learned the first harsh lesson about how the financial system works.

His father repairs aircraft engines at San Francisco International Airport, with his salary arriving on time every two weeks. His mother illustrates for clients, but they often pay months later, or sometimes not at all. Both parents understand that money always flows easily to those who are already wealthy, while it is quite stingy towards others.

This system is designed to be like this.

This sense of frustration brewed for decades, driving him to establish three companies valued at billions of dollars. Each company challenged the sectors of the financial system that viewed ordinary people as nuisances rather than customers.

The Mechanic's Son Who Sees Through the System

1960, San Francisco.

Chris Larson was born into a family that understood the value of stable work. Growing up in a working-class family meant that he experienced the financial system from the perspective of the customer rather than that of the bank. When his parents needed a car loan or a mortgage, they had to deal with the bank staff making decisions behind the scenes. The whole process was opaque, slow, and often unfair.

Why are some people able to easily obtain loans while others cannot? Why do banks charge different interest rates for the same service to different customers? Why do decisions that could be made in just a few minutes take so long?

These are personal troubles faced by millions of families, but very few people with the ability to change everything have experienced it firsthand.

After graduating from high school, Larson began studying aeronautics at San Jose State University, hoping to pursue a pragmatic path and find stable engineering work. However, he felt that the curriculum was too narrow. So he transferred to San Francisco State University, switching to international business and accounting.

After graduating in 1984, Larson joined Chevron as a financial auditor. This job took him to Brazil, Ecuador, and Indonesia. His experience in global business operations allowed him to witness the workings of the international financial system firsthand.

But he needs to understand this system more deeply in order to change it.

In 1991, Larson earned his MBA from Stanford Business School. His professor, Jim Collins, taught him how to build companies that could outlast their founders. These lessons resonated deeply. Larson is not interested in short-term victories or trendy business models. He wants to create infrastructure that will still matter decades from now.

The combination of the Internet and finance

In 1996, the internet boom was just starting.

While most entrepreneurs are busy building websites for pet supplies or grocery delivery, Larsen saw a different opportunity. What if the internet were applied to the most traditional industry - mortgage loans?

Later, he co-founded E-Loan with Janina Pawlowski.

The concept is to put mortgage applications online so that borrowers can apply for loans online without having to deal with brokers who charge unnecessary fees.

At that time, most financial institutions operated like they did in 1976, requiring borrowers to visit bank branches in person, fill out paper forms, and wait weeks to receive approval decisions that could be made by software in minutes.

The E-Loan website went live in 1997, allowing borrowers to compare rates, submit applications, and track progress online. The company eliminated broker commissions and reduced processing time from weeks to days.

But Larson made a decision. E-Loan became the first company to offer FICO credit scores to consumers for free.

This is revolutionary. For decades, banks and credit card companies have been using these scores to determine loans, but consumers have had no access to their own scores. The credit scoring system is a black box that decides whether you can buy a house or a car, yet you have no idea what is inside it. This initiative forces the entire credit industry towards transparency. If borrowers can see their scores, they will understand why they are offered specific interest rates and can take steps to improve their creditworthiness.

In 1999, the internet boom reached its peak with the listing of E-Loan. At its peak, the company's valuation was around 1 billion dollars. However, Larsen was not interested in chasing the bubble. In 2005, he sold E-Loan to Banco Popular for 300 million dollars.

The reason E-Loan is successful is that it automates the processes that banks handle manually. But shouldn't we reconsider how these processes should operate?

Break free from the shackles of banks

In 2005, Larsen was already thinking about his next goal: the bank itself.

What would happen if ordinary people could borrow money directly from other ordinary people, completely free from bank intervention?

He co-founded Prosper Marketplace with John Witchel, the first P2P lending platform in the United States.

What is the concept? Borrowers can post loan requests, explaining what they need the funds for and the interest rate they are willing to pay. Individual investors can browse these requests and choose which loans to fund. The market will determine interest rates based on actual supply and demand rather than the opaque formulas of banks.

This platform democratizes both lenders and borrowers. Those with good credit can earn higher returns than savings accounts. Those with imperfect credit can obtain loans that traditional banks would not offer.

But Prosper faced a problem with E-Loans that had never been encountered before: regulatory uncertainty. When the securities laws were enacted decades ago, no one could have imagined that ordinary people would lend money online to strangers. In 2008, the U.S. Securities and Exchange Commission (SEC) ruled that P2P loans are, in fact, securities that need to be registered and disclosed. Many companies might choose to fight against regulators or look for loopholes. However, Larson chose a different path.

He did not confront the authorities, but rather cooperated with them. Prosper submitted a prospectus to the SEC and adjusted its business model to comply with securities law requirements. This helped the company weather regulatory challenges and continue to grow.

Because simply creating better technology is not enough. You also have to help regulators understand why new rules are necessary.

In 2012, Larsen resigned as CEO of Prosper but continued to serve as chairman. He was already thinking about his next project. P2P made him see that technology could replace the intermediary role of traditional finance. But the truly ambitious goal was not domestic lending.

but international payment.

Build a Value Internet

The idea behind Ripple originated from a simple observation: cross-border remittances are still more difficult than sending emails.

International wire transfers take several days, are expensive, and often fail for unclear reasons. In an era where information can travel around the world in milliseconds, transferring funds seems stuck in the 1970s.

In September 2012, Larson co-founded OpenCoin with programmer Jed McCaleb. Their goal was to build a payment protocol that could settle transactions between any currencies in seconds, rather than days. The company underwent several name changes, becoming Ripple Labs in 2013 and simplifying to Ripple in 2015. However, the mission has remained the same: to create what Larson calls the "Internet of Value."

Ripple's approach is different from Bitcoin; Bitcoin was designed as an alternative to traditional currency. The technology developed by Ripple allows traditional currencies to flow more efficiently. Banks can use Ripple's network to settle international payments without needing to open accounts in every country or region where they do business. The system uses Ripple's native digital currency, XRP, as a bridge asset.

Banks do not need to exchange US dollars to euros through multiple intermediaries; they can simply exchange US dollars for XRP, transfer XRP to another bank, and then that bank can exchange XRP for euros. The entire process can be completed in a matter of seconds.

During Larsen's tenure as CEO, Ripple signed partnership agreements with major financial institutions, including Santander Bank, American Express, and Standard Chartered Bank. You could call it a pilot project or an experiment. However, banks are indeed using Ripple's technology to process real customer payments worth millions of dollars.

With the explosion of the cryptocurrency market in 2017 and 2018, XRP became one of the most valuable digital assets in the world. At its peak, Larsen's holdings were worth more than $59 billion on paper, briefly making him one of the richest people in the United States.

But Larsen learned from his previous company that expansion requires different skills than founding. In 2016, he stepped down as CEO to become Executive Chairman and hired Brad Garlinghouse to handle day-to-day operations, while he focused on strategy and regulatory relationships.

Success is about to bring scrutiny.

Regulatory challenges

December 2020. The call that every cryptocurrency executive fears.

The U.S. Securities and Exchange Commission has sued Ripple, alleging that XRP is an unregistered security and that the company raised $1.3 billion through illegal securities offerings.

This lawsuit has brought nearly five years of uncertainty. The price of XRP has fallen, and exchanges have delisted the token to avoid regulatory risks. Ripple may face hefty fines, and its business model may undergo fundamental changes.

Larson could have quickly settled and then turned to other projects. Many cryptocurrency entrepreneurs would do so. But he chose to fight.

Ripple has spent tens of millions of dollars on legal fees, arguing that XRP is a currency rather than a security. The company's lawyers pointed out that Bitcoin and Ethereum have been classified as non-securities by regulatory agencies, and that XRP operates in a similar way.

This strategy has been proven to be correct, but it took several years to be vindicated.

In 2023, Judge Analisa Torres ruled that the programmatic sales of XRP to retail investors do not constitute a securities offering. This decision is a partial victory that helps clarify the regulatory status of digital assets.

In 2025, the U.S. Securities and Exchange Commission dropped its appeal and reached a settlement of $125 million, which is a substantial fine but far below the amounts many anticipated. This legal victory validates the long-term strategy that Larson took in building his cryptocurrency company.

Unlike many cryptocurrency companies operating in a regulatory gray area, Ripple has cooperated with regulators from the very beginning. When the regulatory crackdown came, the company was prepared.

During the entire legal battle, Ripple continued to expand its business. In April 2025, the company acquired the top brokerage firm Hidden Road for $1.25 billion, adding trading and custody services. Ripple is also seeking a national bank charter and has partnered with BNY Mellon to provide custody services for its RLUSD stablecoin reserves.

Silent influence

Today, Larsen's influence far exceeds the company he founded.

In 2019, he and his wife, Lina Ram, donated $25 million worth of XRP to San Francisco State University, the largest cryptocurrency donation ever received by a U.S. college at the time. The donation established an endowment chair in the field of fintech and innovation, and simultaneously funded global programs aimed at students. The university has strict processes for accepting and managing donations. By collaborating with these institutions, Larsen helped to normalize cryptocurrency philanthropy.

He also funded privacy advocacy activities through the "Californians for Privacy Now" coalition. The coalition successfully pushed California to pass a financial privacy law that requires companies to obtain consumer consent before sharing personal data. The campaign collected 600,000 signatures and lobbied large financial companies to withdraw their opposition.

Recently, Larsen has begun to focus on the environmental impact of cryptocurrency. In 2021, he launched the "Change the Code, Not the Climate" initiative, funding efforts to persuade Bitcoin miners to transition from energy-intensive proof-of-work mining to more efficient alternatives.

This position puts him at odds with Bitcoin minimalists who insist that proof of work is essential for network security. However, Larsen believes that if cryptocurrencies want to achieve mainstream adoption, they must address climate issues.

"This movement is not against Bitcoin, but against pollution," Larsen explained. "We need to clean up our industry. The problem is not about powering Bitcoin with clean energy, as some suggest. We need to allocate limited clean energy for other important purposes. The issue is about changing the code to significantly reduce energy consumption. This is the way forward for environmental protection."

His willingness to challenge the orthodox views of cryptocurrency reflects the same thinking in his career: popularity is not always the best.

At 64 years old, Larson still insists on working six days a week while pursuing some hobbies that reflect his clear and organized approach to handling complex problems. He and his sons restore classic cars from the 1960s, taking them apart and reassembling them from the chassis up. These projects take three years to complete and demonstrate his consistent attention to detail throughout his career.

The future he envisions is that remitting $100 from San Francisco to Lagos takes only a few seconds and costs just a few cents, allowing small businesses to enter the international market without having to deal with complex banking relationships.

His three companies challenge different aspects of the financial system that fail to serve ordinary people well.

E-Loan makes mortgage shopping transparent. Prosper has democratized lending. Ripple has accelerated international payments.

Each enterprise succeeds by building infrastructure that others can use rather than trying to control the entire market. This approach requires patience and long-term thinking, which are rare qualities in an industry known for speculation and quick profits.

In an era where cryptocurrencies are often associated with speculation and volatility, Larson has proven that patient infrastructure building can lead to lasting change. His work is not yet complete, but the foundation for a financial system that serves users rather than institutions has already been laid.

Currency is becoming more like information — faster, cheaper, and easier for those previously excluded from financial services to access.

This transformation is still unfolding, but the direction is clear. Chris Larsen has been building the track that drives this transformation.

This is the story of Chris Larson. See you in the next article.