Regulation
Why does Ripple want more government regulation?
Since their inception, cryptocurrencies have railed against government interference and regulation. But Ripple wants governments to intervene.
Ryan Zagone, director of regulatory affairs at Ripple Labs, urged the UK government to create regulation that strikes a balance between “capturing risk and enabling innovation.” the interview In an interview with The Telegraph, Zagone compared the current state of cryptocurrency markets to the early stages of the internet. “We’re at that point where we need more clarity and regulation and we need more certainty. It’s a good time to start revisiting that ‘wait and see’ approach that regulators have taken,” he said. He said regulation would create “guardrails” to attract new entrants, such as institutional investors.
Of course, Ripple has always strictly adhered to the regulatory manual. (See also: Ripple CEO Supports Government Regulation of Cryptocurrencies). Over the years, the San Francisco-based company has lobbied regulators in the U.S. and U.K. on the benefits of regulating new cryptocurrency technologies. In 2016, Zagone wrote to members of the House Energy and Commerce Committee that a “workable regulatory framework (for financial infrastructure) is necessary to keep the United States competitive.”
Zagone’s comments were addressed to the UK government’s taskforce, formed earlier this year to address “cryptocurrency risks.” (See also: UK government launches cryptocurrency probe). These are the first such positive statements about regulation from a major cryptocurrency. Crypto enthusiasts have so far been met with government efforts around the world to assert legal authority over the day-to-day transfer and transactions of coins. In turn, this has impeded the flow of institutional money into cryptocurrencies and led to thinly traded markets that rise or fall at the slightest hint of negative news. For example, the Chinese government’s attempt to restore order to cryptocurrency markets in 2014 led to a prolonged price crash for bitcoin that lasted nearly two years. Ripple’s XRP, itself, fallen 6% after Zagone’s comments were published. As of 18:23 UTC, the cryptocurrency was trading at $0.64, down 3.5% from its price 24 hours ago.
Why is Ripple interested in regulation?
Overall cryptocurrency markets are expected to benefit from regulation because it will bring new investors and order. Ripple itself will also benefit from increased regulation. Its products help implement existing regulatory initiatives for customers. For example, xCurrent, the company’s product for bank-to-bank messaging, is compliant with existing regulatory processes. “Based on individual country regulations, Ripple supports each bank in identifying and assisting in meeting all regulatory requirements,” the product brochure states. States.
But their main advantage comes from simplifying and speeding up the complex regulation that dictates cross-border transfers. In the current regulatory framework, individual governments are responsible for drafting and implementing regulations. This increases the cost and complexity of operations for financial services institutions. In its statements, Ripple has repeatedly called for an international regulatory framework for its suite of products. Regulatory clarity in a changed financial ecosystem will help increase the market for its products and attract new customers to Ripple.
It could also benefit Ripple’s cryptocurrency XRP, which has been declining amid a wave of negative media reports. Cryptocurrency regulation will boost its adoption among financial institutions that use xRapid, Ripple’s product that uses XRP, and boost its valuation in cryptocurrency markets.
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