Ripple has now promoted stronger regulation of cryptocurrencies in the UK . Above all, the current legal uncertainty ensures that especially Ripples’ main customers are very cautious regarding the use of XRP.
Ryan Zagone is Head of Regulatory Relations at Ripple and is now demanding that the UK government regulate cryptocurrency matters more rigorously and clearly. As a role model, he calls Japan. With more regulation, the “Wild West” would finally put an end to cryptocurrencies, as he calls it. The government should find a healthy balance between protecting investors and enabling innovation.
So far, most governments are more cautious about regulating cryptocurrencies. Frequently, cryptocurrencies are regulated by existing laws and the government looks at how the market is developing. However, there are often differences of opinion about the interpretation of the respective laws.
Ripple has mainly customers from the banking and financial sector. The company’s technology is primarily designed to make international payments, within a few seconds, at a fraction of the previous cost. In order to save liquidity, banks can also use Ripples’ own cryptocurrency XRP. However, only a few of them do so far. Only about 6 of the more than 100 partners of Ripple also test the use of XRP.
One of the reasons why the XRP usage is so low is probably also due to the unclear regulation of cryptocurrencies. It is still not clear in many countries how cryptocurrencies should actually be treated. Especially banks that are traditionally in a very heavily regulated environment are less likely to do so. Stronger regulation could make the conditions for using cryptocurrencies much clearer. This would put a lot of uncertainty on the market as far as the status of cryptocurrencies is concerned and it would also make financial institutions more vulnerable to cryptocurrencies. Hence Ripple’s demand for stronger regulation.