The San-Francisco based Ripple recently shared a detail blog post on why they should think clear regulation matter for crypto and blockchain industry. The firm appreciates the regulatory move of the UK’s Financial Conduct Authority (FCA) which they think as the role model for other countries in terms of digital asset regulation.
Clear Regualtion is Must for Blockchain and Digital Assets to Flourish
In a blog post updated on Sept 26, Ripple compares clear regulations for the crypto industry with the rules for the basketball game. It says;
You can “play a game of pickup basketball without ever having met the players before or even being able to speak their language….because the key definitions and core rules of the game are clear and consistent.
— Ripple (@Ripple) September 26, 2019
With that being said, Ripple mentioned such a clear understanding of crypto space is currently missing. The article further states that the “clear and consistent language and regulatory approach is crucial for blockchain and digital assets to flourish”.
Without clear and consistent frameworks for this new technology, many financial players and companies will continue to rely on outdated laws and rules.
The platform asserts the traditional payment transfer that takes a day to complete but still carries risk alongside. In a continuous note, the blog reads, RippleNet exists to address this issue and eliminates the need for pre-funded accounts. Consequently, Ripple claims its products can quickly settle the transaction by using XRP cryptocurrency as a bridge to offer fiat currency transactions. While Ripple itself believe it is super exciting and excellent technology to implement across the payment industry, it argues that it is challenging without effective regulatory frameworks.
By appreciating UK’s top regulator Financial Conduct Authority which labeled Ripple’s XRP as an exchange token because it uses for cross-border transactions, Ripple says such classification of assets is critical for companies to ensure they’re working under the regulatory perimeter.
Businesses need this clarity on classification. As they work to build solutions for a particular region, they must understand the boundaries of what is permissible. Similarly, governments require clear guidelines to recruit new companies and promote emerging technologies that can lead to job gains and tax revenues.
Ripple says such clarity protects customers and not just companies. Moreover, Ripple compares US is leading other countries in terms of the internet whereas the UK is one step ahead with the classification of digital assets in crypto-blockchain space. Other countries with feasible crypto regulations include Abu Dhabi, Switzerland, Thailand, Singapore, and many others. Conclusively, Ripple adds that the UK’s framework on digital assets and blockchain will act as an example for other countries.
Countries that take the lead on these frameworks will be better positioned to attract capital, companies, and jobs—particularly since blockchain technology is here to stay.
Image source – Flickr