Ripple has always worked with regulators trying to find the best way forward regarding the framework which will govern digital assets like XRP.
We reported on Ripple’s brand new Government Relations team with signings from governmental departments and financial regulators recently.
First I would say from a government standpoint they want to know they have an attractive regulatory regime that will attract innovation, new technological advances. That all leads to jobs and that leads to tax revenues
BOND, Michelle Bond
In a recent video on the Ripple Drop Michelle explained that a clear regulatory framework is needed to move forward for both governments AND businesses.
She explained that regulation by authorities in the destination country of a remittance payment, for example, could put companies off entirely.
The regulatory framework needs to be accepted across the globe.
License to Thrill
Michelle went on to say the best way for the US, in particular, to regulate crypto assets like XRP would a principles-based system.
The above ideology encompasses industry regularity, consistency, sincerity, prudence, continuity, periodicity, and good faith.
A rules-based system tends to become static, it can become outdated & harder to work with in the future with newer innovations
Michelle Bond – Head of Government Relations
This is in contrast to a rules-based system where very strict rules MUST be adhered to or companies face serious financial penalties, even prison for stepping outside the rules.
We happen to agree very strongly with Michelle, a blossoming ecosystem needs to be watered & guided gently rather than stifled into stagnation.
XRP a Security?
Ripple’s head of Gov relations finished the video by discussing the need for clarity over asset classifications, more precisely whether XRP is classed as a security.
As Michelle points out, the UK FCA has been very forward-thinking in their classification of XRP as a utility token, meaning it is not tied to the same trading or operating laws.
One of the greatest ones is the UK FCA, they recently revised their guidance just a few weeks ago, they came up with very clear definitions for crypto assets, they came up with a definition for a utilities token, an exchange token & also for a securities token. That gave the industry a lot of comfort
Michelle Bond – Ripple
At the end of the day the SEC and the UK FCA have possibly the strongest of ties, no one knows why the SEC is taking forever to rule but they will surely not disagree with their UK counterparts.
Interestingly, one reason the SEC could potentially be holding back on the ruling is the amount of XRP Ripple currently holds, 50% or above means security token?
Ripple’s Head of Government Relations @michellebond111 breaks down the importance of regulatory clarity for #blockchain and digital assets in this #RippleDrop extended interview. https://t.co/SKSpNVWwp8 pic.twitter.com/ZHwtD8TLVW
— Ripple (@Ripple) September 6, 2019
Ripple Not Dumping XRP…
The above could be rumor and do your own research, but a similar situation occurred with Ethereum with its launch and initial sales.
Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions,”
William Hinman – SEC
Either way, it would explain the fact that Ripple sell-off some of their holdings on a monthly basis to invest and develop the ecosystem and ledger network.