Ripple is considering moving to London due to uncertainty about its future in the US
Ripple, a roughly $ 10 billion financial and technology company best known for its XRP cryptocurrency, is considering moving its headquarters overseas due to discontent with the US regulatory framework..
CEO of a San Francisco-based crypto company Brad Garlinghouse (Brad Garlinghouse), who said he visited London last month, told CNBC that the Financial Conduct Authority (FCA) does not consider XRP to be a security, which is a key source of domestic contention in the US. He added that other regions provided similar assurances..
«What you see in the UK is a clear classification and the UK FCA has taken the lead in defining how we should think about these alternative assets and their use cases», – said Garlinghouse.
«This has resulted in clarity that XRP is not a security and is used as a currency. With this approach, it would be profitable for Ripple to work in the UK».
Garlinghouse said that in addition to the UK, Switzerland, Singapore, Japan and the United Arab Emirates are also being considered as countries for Ripple’s possible move abroad..
«US is out of sync with other G20 markets and how some of them think about these rules», – he added.
Chris Larsen (Chris Larsen), co-founder and executive chairman of Ripple, first announced the company’s desire to move its global headquarters outside the US in an interview with Fortune magazine earlier this month.
Ripple has been involved in a legal battle with some cryptocurrency investors who accuse it of selling unregistered securities and misleading claims about the nature of XRP. The company disputes the allegations, insisting that the XRP cryptocurrency is not and should not be classified as a security..
Meanwhile, officials from the Securities and Exchange Commission (SEC) have said that cryptocurrencies such as Bitcoin and Ethereum are not securities that should be regulated in the same way as stocks. and bonds. But the status of XRP has not yet been confirmed..
Label «security» is extremely important because it could force XRP to follow strict new rules, which could have a huge impact on Ripple. Despite the company claiming to be cryptocurrency independent, Ripple owns 55 billion of the 100 billion XRP tokens in existence. The company even generates income from selling some of its XRP assets every quarter..
XRP is currently the fourth largest cryptocurrency in the world by market value, according to CoinMarketCap data. Ripple says it primarily uses a digital asset as «intermediate currency» for their clients, consumers of financial services, to send money abroad quickly and cheaply.
The company works with some of the largest financial institutions in the world, including Santander and American Express. However, these large banks do not currently use XRP to settle transactions..
Instead, they use an interbank messaging platform developed by a crypto company that is similar to Swift but is based on blockchain, the technology behind many of the world’s most famous virtual currencies. Ripple chief admits banks are in no rush to use XRP for cross-border payments.
«The largest banks don’t necessarily see this as a big problem because they already have liquidity all over the place.», – he said, adding that «it will take more time», to attract larger lenders.
Garlinghouse previously stated that «dozens» banks will use its cryptocurrency product, now known as «liquidity on demand» (on-demand liquidity), by 2019. Despite winning over money transfer services such as MoneyGram and Azimo, Ripple has yet to convince major banks to even publicly announce whether they are using XRP..
Ripple CEO Says Uncertainty Over Cryptocurrency Legal Status May Be To Blame. «Due to a lack of clarity on some of these rules, we have clients who are reluctant to talk publicly about what they are doing.», – he said.
Another cause for concern for large banks may be the use of cryptocurrency in illegal transactions. According to analyst firm Elliptic, $ 400 million worth of XRP transactions have been linked to illegal transactions such as theft and fraud. For his part, Garlinghouse said that Ripple’s proprietary technology cannot be exploited by hackers..
«We only work with regulated financial institutions», – he said. «You cannot use Ripple’s technology to launder money or circumvent any regulation, because our technology allows leading institutions to be regulated».
Ripple was last valued at $ 10 billion in a $ 200 million round of funding late last year. Founded in 2012, the company rose to prominence in late 2017 and early 2018 when XRP surpassed $ 3 per coin. The XRP token price today is around 26 cents ($ 0.26). However, XRP is up over 34% since the beginning of the year..
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