The regulation uncertainty in the cryptocurrency market appears to be heading to an end and this could sound Relief for Ripple (XRP). This could mean the much anticipated boom is just around the corner. Regulating bodies seem to agree on one thing; there is no way one can detach cryptos from blockchain. The two are inseparable for decentralization to thrive.
For the last seven months, the crypto verse has been hit by investor low confidence regulatory measures pending implementation. What has made matters worse is that fact that the regulators seem not to understand how blockchain works and which utility tokens they need to crack a whip on. This came days after Ethereum Classic got listed on Coinbase ahead of Ripple.
While addressing central banks and international development officials, the Chief Fintech head at Monetary Authority of Singapore, Sopnendu Mohanty said that utility tokens are part and parcel of the a decentralized system. In his address to attendees at the G20 forum on emerging technologies and financial inclusion in Riyadh, Saudi Arabia, the chief officer appears to strike a balance between traditional and distributed databases.
Way Forward for Regulators as Ripple (XRP) waits
Mohanty’s argument comes at a time when there is a lot of confusion as how the current regulations are going to be effected and how to determine coins and tokens that do not fall under the no-securities category. Ripple (XRP) seems to be the beneficiary of the outcome and this could be the beginning of reshaping the market regulations given the fact that digital tokens are utilities are “Incentive and security models upon which open, permission less and censorship-resistant transaction-recording systems are built.”
Once regulators begin to understand that digital currencies are technologically coordinated and can turn around the existing financial systems. A system that improves economic coordination should be supported by all and sundry. Coming up with sound policies that help blockchain technology improve traditional system is the only way out of the current conflicts between authorities and the utility token usage.
New Regulator Perspectives and XRP Dilemma
Authorities and regulators are more informed about cryptocurrency and blockchain compared to six months ago. They now know that specific tokens have specific real world issues they are seeking to address. This way, they can be managed using the current anti money laundering and customer protection rules. The securities restriction might not work since it is outdated and complex.
Regulators are working on the assumption that ICOs are just scams and the investor needs to be protected. Vetting ICO’s with the “intent” to launch is easier that “banning” it when it has raised enough funds without confirming to KYC rules.
there are arguments that Ripple needs to meet set standards to be able to be listed on the US exchanges and with the new open-mindedness of regulators, a lot is expected chart the way forward for this popular digital asset.
Individual State Initiatives
The regulation and securities regulations seem to be going round and round issues that individual authorities can handle. This has led to some forward looking countries to work on regulations that befit their existing systems in order to accommodate digital tokens. Singapore has come up with a framework to differentiate between scam and genuine tokens and ICO’s.
The Swiss authorities have made regulation very simple by classifying digital assets into payment, utility and ERC20 tokens. The ERC20 token are the only ones that are subject to the securities regulations. This arrangement clearly breaks down everything and the role of the regulating body is clearly cut and not uncertainties whatsoever and makes it easy for taxation purposes.
Other countries taking the positive steps include Malta, Gibraltar and Bermuda. These countries are setting positive frameworks and this has prompted many blockchain outfits to shift their bases here as these States are becoming the safe havens for innovative blockchain projects and cryptocurrencies.
US S EC Stance on ICOs and Exchanges
the US Securities and Exchange Commission appears to be lagging behind with more exchanges and coins opting to relocate to countries seen as “friendlier “ to cryptocurrencies and elated establishments. However, with the regulations becoming clear and more regulators becoming more informed about blockchain technology, things could be changing in the near future.
After the SEC defining security and no-security assets, regulating bodies seem to be doing their homework and making informed decisions. This recognition is seen to ignite the crypto market growth with additional trust and confidence coming in from reputable and individual investors.
with the understanding that each digital asset has a role to play in the market and individual authorities taking the initiative to separate good and bad tokens and ICO’s, a boom in the market is likely to occur. Including existing regulations to govern the new technology is the only way forward for Ripple (XRP) and that is the direction being taken.