Ripple claims that the lack of clear regulation on digital assets could start a massive exodus on tech firms and tech talent far away from the United States. In the Ripple news today we take a closer look at how this could play out in the future.
The head of global institutional markets at Ripple Breanne Madigan says that the first clear use case for XRP and other cryptocurrencies is in the payments industry. She explained:
“At Ripple, we see payments as the first obvious use case for digital assets. A key innovation in leveraging a blockchain for payments is that you can move value efficiently—and many subsequent use cases for blockchain technology, including trade finance, smart contracts and lending—all stem directly from the payments innovation. This is why we are focused on this baseline use case first. With digital assets, for the first time, there’s a way to settle transactions across currencies instantaneously—this helps optimize risk management frameworks, and reduces significant friction pain points including time, trapped capital, and excessive fees. As additional use cases beyond payments develop, more capital will enter the space.”
From here, Ripple claims that the company has a primary focus on XRP and is using the digital asset as a bridge between fiat currencies. Madigan explained that the company’s on-demand Liquidity platform is designed to give the banks and financial institutions a fully compliant way to send money across the world starting with only one fiat currency and settling in another using XRP to facilitate transactions:
“Ripple’s vision is to collaborate between traditional financial institutions and technology innovators for the explicit use case of cross border payments. Specifically, by leveraging the digital asset XRP as a bridge currency, Ripple facilitates instant fiat-to-fiat payments across borders for partners like MoneyGram. There is no singular third party or global central bank that keeps track of how cross-border payments move and are settled, so the world has created a complex system of correspondent banking and nostro/vostro accounts that trap an estimated $10 trillion dollars in capital. Using digital assets as a bridge currency can efficiently free up this trapped capital and make the process of sending money cross-border faster, less expensive, and more scalable, by providing liquidity on demand.”
Madigan says that the regulators should offer more clarity on how cryptocurrencies are treated and regulated. Without clear regulation, the US risks losing the leadership position in new and emerging technologies.
New European Regulations Force BTC Service Bottle To Shut Down
Lagarde Suggests ECB Has To Set Objectives For Digital Currencies
‘’Are we trying to reduce costs? Are we trying to cut out the middleman? Are we trying to have inclusive finance at no cost? There is a whole range of objectives that can be pursued.’’Lagarde admitted to the increased demand for stablecoins ignoring Bitcoin and referred to the interest shown by the Canadian and British counterparts as well:
‘’My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects… we’d better be ahead of the curve because there is clearly demand out there that we have to respond to.’’Last month, the bank was thinking about launching a digital currency and the proposal was a part of the new draft that seeks to ban the high-risk crypto projects. At that time, a target for ECB was Libra and the global digital currency projects developed by some entities such as Facebook which have been repeatedly criticized by European leaders. With a digital currency that will be parallel to the euro, the consumers will have a cheaper means of payment option and this will also have a huge impact on the bank’s fiscal policy. The Central bank will also be able to inject funds into the economy to achieve inflation targets which the ECB left unchanged so far.
SEC Charges Shopin Founder For Its ‘Fraudulent’ $42 Million ICO
“As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile [...] Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering."Furthermore, he also told the public that Eyal lied about having forged partnerships with established retail outlets when in fact no such partnerships existed. The SEC also claims that Eyal misappropriated investor funds to pay for personal expenses. The SEC charges Shopin for this and the complaint clearly states:
“Eyal used over $500,000 of investor funds for expenses such as his rent, retail shopping, entertainment, tickets to philanthropic events, and a dating service, but omitted to disclose to investors that he would use any proceeds for his own benefit.”The official charges show that Shopin was violating the anti-fraud and registration provisions of the federal securities laws. For that, it is seeking injunctive relief, disgorgement with prejudgment interest as well as civil money penalties.
AML Chief: Crypto Companies Filed 7,100 Suspicious Activity Reports
“It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us.’’Venezuela is one particular case where it seems that a hotbed of suspicious activity is forming according to Blanco. The Latin American country has its own oil-backed token- The Petro, and it seems that it has spawned an increasing number of the unregistered money services businesses. The country is having a lot of issues with the high inflation and Petro was the tool that was supposed to help the country.Domestically, the crypto-related companies reported more darknet-linked customer transactions and scams along with a lot of activities that targeted the elderly who have limited knowledge about cryptocurrency and therefore are opened to risks. Blanco explained that all of the financial institutions have to re-consider the crypto SAR reporting especially those who currently don’t report any activities. He said:
“If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency.’’The remarks came as the crypto exchange and analysts firms both boost their efforts to expand suspicious activity reporting. As it was reported by Forbes, there was a noticeable existence of the confidential indicators of suspicion for Virtual asset service providers and also a playbook for easily picking out the suspicious activity assembled by the stakeholders themselves.
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BTC App Bottle Pay Startup Shuts Down Due To New EU Laws
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