Regulation
Why does Ripple want more government regulation?
Since their inception, cryptocurrencies have stood up against government interference and regulation. Ripple wants governments to intervene.
Ryan Zagone, director of regulatory relations at Ripple Labs, urged the UK government to create regulations that strike a balance between “capturing risk and facilitating innovation.” the interview In an interview with The Telegraph, Zagone compared the current state of cryptocurrency markets to the early days of the internet. “We’re at a time where we need more clarity, more rules and more certainty. It’s a good time to start revisiting this wait-and-see approach that regulators have taken,” he said. Regulation, he said, would create “guard rails” to attract new entrants, such as institutional investors.
Certainly, Ripple has always complied with regulatory standards. (See also: Ripple CEO Supports Government Regulation of Cryptocurrencies). Over the years, the San Francisco-based company has lobbied U.S. and U.K. regulators about the benefits of regulating new cryptocurrency technologies. In 2016, Zagone wrote to members of the House Energy and Commerce Committee that a “viable regulatory framework (for financial infrastructure) is necessary to maintain U.S. competitiveness.”
Zagone’s comments were addressed to the UK government’s taskforce, which was formed earlier this year to address “cryptoasset risks.” (See also: UK government launches inquiry into cryptocurrencies). These are the first positive statements of their kind regarding the regulation of a prominent cryptocurrency. Until now, crypto enthusiasts have resisted efforts by governments around the world to assert legal authority over the transfer and daily transactions of coins. In turn, this has prevented the flow of institutional money into cryptocurrencies and resulted in thinly traded markets that soar or crash at the slightest sign of bad news. For example, the Chinese government’s attempt to bring order to cryptocurrency markets in 2014 led to a prolonged slump in bitcoin prices that lasted nearly two years. Ripple’s XRP, itself, fell by 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?
The general cryptocurrency markets stand to benefit from regulation, as it will attract new investors and order. Ripple itself also stands to 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, complies with existing regulatory processes. “Based on individual country regulations, Ripple helps each bank identify and help meet all regulatory requirements,” the product brochure reads. States.
But their main advantage lies in simplifying and speeding up the complex regulation that governs cross-border transfers. Under the current regulatory framework, governments are responsible for drafting and implementing regulations. This increases the costs and complexity of operations for financial services institutions. In its statements, Ripple has repeatedly called for an international framework for its product line. Regulatory clarity in a changed financial ecosystem will help grow the market for its products and attract new customers to Ripple.
This could also benefit Ripple’s cryptocurrency XRP, which has been falling following a wave of negative media reports. Cryptocurrency regulation will increase its adoption among financial institutions using xRapid, Ripple’s product that uses XRP, and increase its valuation in cryptocurrency markets.
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