Ripple Urges UK To Develop Crypto Regulatory Framework
While it is currently embroiled in a dispute with the Securities and Exchange Commission (SEC) in the United States, Ripple wants to make some progress with politicians in the United Kingdom.
The company launched the XRP ledger and its XRP token powers the network, which is at the center of its legal battle with the SEC.
The United Kingdom is making revisions to the Financial Markets and Services Bill, which has been drafted for regulating the country’s regulatory framework for the crypto market.
In expectations of the said revisions, a new whitepaper was issued by Ripple Labs that focus on regulation.
The bill was introduced on 20th July this year and the British Parliament voted to add some further elements to it in October for more comprehensive crypto regulation.
The recommendations that Ripple has put forward are focused on developing a clear regulatory framework for crypto that can put crypto asset activity into different categories, as per their risk profiles.
According to Ripple Labs, there is a great difference between these risk profiles of crypto assets and it believes that any upcoming regulation should be able to distinguish between propositions related to businesses and to customers.
The paper also states that the treatment of crypto companies should also depend on their link to the rest of the economy, as this indicates the extent of the risk they pose.
The environmental impact
The whitepaper released by Ripple Labs also highlighted the fact that the environmental impact of every blockchain varies.
It depends on how the tokens of the said blockchain are mined, which is a reference to the proof-of-work (PoW) and proof-of-stake (PoS) blockchains.
None of these methods are used by Ripple’s blockchain because its methodology is Proof-of-Consensus (PoC). This involves the nodes deciding which transaction to process.
An 80% consensus is required for this purpose. Ripple has presented the argument that as compared to the PoW mechanism used by Bitcoin and other cryptocurrencies, the XRP token is environmentally friendly.
The recommendations in Ripple’s whitepaper also include the United Kingdom following in the footsteps of some of the other jurisdictions that have already developed their regulatory frameworks.
The company believes that those regulatory frameworks would assist these countries to be a hub for the crypto asset industry, including Dubai, Singapore and the European Union.
Ripple said that these regimes could be used for guidance and would help the UK in developing its own bespoke framework for regulating and empowering the crypto industry.
According to the company, this kind of framework would support the crypto industry and help it grow, while also helping in building trust with the public.
The whitepaper also went on to say that it was also a must to provide better crypto education to society at every level because the current scenario was not exactly a good one.
Ripple has already been facing a tough time for the last year, given its legal battle with the SEC in the United States, which might come to an end soon.