The CEO of Ripple, Brad Garlinghouse, is in the news lately for stating that Coinbase (the largest cryptocurrency exchange out there) should integrate his native cryptocurrency of the Ripple network – XRP – into its platform.
The news came from an interview with Jeff John Roberts from Fortune at CB Insights Future of Fintech conference in New York. During it, the Ripple CEO Garlinghouse said that XRP is designed to solve problems – and is doing that for many institutions and large-scale banks. This is why Coinbase should definitely be interested to participate in it.
As Garlinghouse stated:
“As we solve problems at scale for institutions, I think it’s in Coinbase’s interest to participate in that,”
The CEO of Ripple also added that XRP is clearly not a security. He emphasized that the cryptocurrency exists independent of Ripple – and even if the company fails, XRP would exist as a cryptocurrency. On top of this, he noted that XRP tokens have a technological purpose of settling transactions between institutions and individuals in the form of a utility currency (unlike stocks and traditional securities).
In his own words, Garlinghouse said:
“I think it’s really clear that XRP is not a security. XRP exists independent of Ripple and it would operate even if Ripple Labs failed,” said Garling house. “I don’t think that our ownership of XRP gives us control. Saudi Arabia owns a lot of oil-that doesn’t give them control of oil.”
Garlinghouse also outlined the reasons why XRP has a non-security nature and why Coinbase should add it to its platform. Below, we are outlining them too:
- Ripple Labs do not have control over XRP
- XRP is a utility currency and its primary use case is payment processing, unlike stocks and traditional securities
- Ripple isn’t a PoS network and the fact that Ripple Labs have a lot of XRP does not give Ripple Labs control over the Ripple blockchain network
- Even if Ripple Labs failed, XRP would still exist
Even though the comments by Garlinghouse are reasonable and logical, the US Securities and Exchange Commission (SEC) needs to officially clarify them and pave the way to a successful future for XRP.
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