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Sunday, December 6, 2020

Crypto Firm Ripple Is Planning To relocate to UK over Regulations in The USA

Crypto firm Ripple- which is worth $10 billion, is most well known for its XRP cryptocurrency- is planning to relocate its headquarters all the way from the USA to the UK, after expressing their frustration over the regulatory environment in the States. The firm’s CEO, based in San Francisco has spoken about his visit to England just the previous month- where he mentioned how the markets in the UK under the Financial Conduct Authority don’t really consider XRP to be a security. And this has been a major point of contention in the USA. He also added that there were other regions around that have been providing similar assurances. 

Why Do They Want to Shift the Headquarters of Ripple?

Garlinghouse, the CEO mentioned that the UK has a clear taxonomy over things, where the FCA has a leadership role in trying to characterize how the citizens and firms think about their assets, and their usage. This clear jurisdiction has brought out a singular outcome, which is that XRP is not really a security- and can be mostly used as a form of currency. Keeping that clarity in mind, it would be much better for the crypto firm to be working in the U.K.

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Not just the United Kingdom, but Ripple was also planning other potential headquarters such as Switzerland, Japan, Singapore, and the UAE. He believes that the US is completely out of sync with the way the markets of G20 work- and how most countries think about their regulations. The executive chairman of Ripple, Chris Larsen was the first one to bring out this desire of the company to have a global HQ which would be outside America- in an interview that took place with Fortune sometime this month. 

Ripple
Ripple

Ripple has also been in a legal battle that has involved several investors of cryptocurrency who have been accusing this company of selling securities that are unregistered and making statements about XRP that are quite misleading. The company has obviously denied all allegations and has pushed back on several suggestions that speak of XRP as a security. The SEC officials, on the other hand, have mentioned that most cryptocurrencies like ethereum and bitcoin are not really securities that are to be regulated in the way that bonds and stocks are regulated. This makes the entire status of XRP ceiled in uncertainty. This label of security is actually important because it will definitely bring XRP under several new rules that could heavily impact the company. Although Ripple claims itself to be completely independent of any cryptocurrency, they do own around 55 billion of the total 100 billion XRP tokens that exist. 

What is XRP?

XRP is nothing but a cryptocurrency which is the fourth-largest by market value- as far as reports from CoinMarketCap go. Ripple is of the opinion that they use just the digital asset as a ‘bridge currency’ in order for its clients of financial services to send cash overseas cheaply, and quickly. 

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Although Ripple has been working with quite a few important financial institutions, the institutions don’t really use XRP in order to settle their transactions. 

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