Since the emergence of Facebook’s Libra project and concerns of money laundering, there have been concerns over negative rules being enacted to govern the industry in the U.S. Ripple joins other major blockchain firms in the country calling on Congress not to stifle digital innovation in America.
Congress Should Adopt a Nuanced Approach to Regulations
In an open letter to Congress, Ripple CEO Brad Garlinghouse and company co-founder Chris Larsen urged lawmakers to adopt a nuanced approach to cryptocurrency regulations. The pair enjoined the U.S. legislature not to use too broad a brush in painting the entire industry.
Ripple’s sentiment echoes those repeatedly espoused by many stakeholders both within and outside the U.S. crypto scene. For many commentators, there are problems attached to lumping all cryptos into a single bucket.
Many of these problems center around the degree of regulatory scrutiny that particular tokens should face. It is often problematic for regulatory bodies to classify cryptos as commodities, securities, currency, etc.
For Ripple execs, responsible actors looking to create legitimate digital asset products dominate the crypto space. Thus, Congress should be careful not to adversely affect the growth of such establishments while trying to combat the fraudulent actors in the industry.
America Runs the Risk of Falling Behind
In the letter, Garlinghouse and Larsen also highlighted the risk posed by negative cryptocurrency regulations to America’s quest of maintaining its global relevance in the evolving digital economy.
An excerpt from the letter reads:
“We urge you to support regulation that does not disadvantage U.S. companies using these technologies to innovate responsibly, and classifies digital currencies in a way that recognizes their fundamental differences—not painting them with a broad brush.”
Ripple prayed Congress to consider the regulatory paradigm that existed during the early internet age and how it benefitted U.S. startups in the industry as the time. Currently, companies like Microsoft, Google, and Amazon are among the largest and most successful conglomerates in the world.
For Ripple, lawmakers in the U.S. have a responsibility to balance out robust regulations with the creation of an enabling environment for digital asset innovation.
Already, there have been negative repercussions of the unclear status of crypto laws in the U.S. As reported by Blockonomi, exchanges have been forced to geofence certain assets from American traders.
Still No Progress on Cryptocurrency Regulations in the U.S.
The letter from Ripple comes as there is still no significant progress in the emergence of Federal regulations for cryptocurrency in America. Recently, Steve Mnuchin, the U.S. Treasury Secretary declared that relevant regulatory agencies in America will collaborate in creating specialized laws for the digital asset industry.
There is also the matter of the Token Taxonomy Act that is still before Congress. This piece of legislation aims to exempt cryptocurrency from securities law. The U.S. Securities and Exchange Commission (SEC) has consistently declared that it would view initial coin offering (ICO) tokens as securities unless Congress makes a new law.
Since the bull market of 2017, there has been an uptick in the degree of regulatory scrutiny applied to the crypto and blockchain space.