The core of Ripple’s recommendation is to finalize a “clear regulatory framework that distinguishes between different types of cryptocurrency activity”, guided by their respective risk profiles.
The crypto firm argues that upcoming legislation must “delineate a clear line” between consumer-oriented proposals and proposals that only support businesses.
According to the paper, cryptocurrency companies should be treated differently depending on their “level of interconnection with the rest of the economy and thus the wider range of potential risks.”
The environmental impact of crypto
The company’s whitepaper also mentions how each blockchain impacts different environments based on how they mine tokens and validate transactions, comparing tokens based on: Proof of Stake (PoS) and proof of work (PoW) blockchain.
Ripple’s XRP token does not use any of the above methods, but rather a Proof-of-Consensus (PoC) methodology in which a network of “unique nodes” agree on transactions that can be processed on the network. Requires at least 80% consensus.
ripple have consistently argued That XRP represents a greener option compared to Bitcoin’s energy-intensive PoW consensus mechanism.
Ripple’s whitepaper also mentions other jurisdictions that have already established regulatory frameworks, such as Singapore, Dubai and the EU, which Ripple feels will help them become “attractive hubs” for the cryptocurrency industry. is recommended to be copied by the UK.
Using these various regimes as a guide, Ripple wrote that the UK should create “its own regulatory framework” to empower the cryptocurrency industry.
Such a framework would provide certainty and support as the crypto business grows, while building trust among the wider public.
Furthermore, the white paper said there was an “urgent need” to improve education in the crypto-sector “at all levels of society”, calling the current political debate on crypto in the UK “a punchline and political football”. ridiculed as
Ripple and SEC
Ripple has battled its own regulatory issues for the better part of the last two years.
US Securities and Exchange Commission filed a lawsuit In December 2020, Ripple Labs accused Ripple Labs co-founder Christian Larsen and current CEO Brad Garlinghouse of selling unregistered securities.
The ongoing litigation largely hinges on whether the XRP token used for cross-border payments can be classified as a security, and therefore must be subject to various laws and restrictions.
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