Ripple Outlines Regulatory Framework for US Crypto Industry

Innovation sandboxes, applying existing frameworks to crypto and communication between the public and private sectors were some of Ripple’s suggestions.


Innovation promotion and consumer protection are central

Ripple, the company whose executives have often criticized the lack of regulatory clarity in the crypto world, has outlined its own framework.

In a post, Ripple has its vision today released for a regulatory framework aimed at fostering innovation while protecting investors in the US. According to the company, regulators should be encouraged to promote innovation. Also, some of the existing frameworks in the US can be applied to cryptocurrencies. Furthermore, there must be “an active dialogue between regulators and market participants”, according to Ripple.

Ripple advocated the proposed measures as a way to bring regulatory clarity to everyone in the crypto space.


The Security Clarity Act

With regard to regulatory sandboxes, the company said the “safe harbor” proposed by SEC Commissioner Hester Peirce would be necessary to “stimulate innovation.” Under this “safe harbor,” network developers would have a grace period to build without being subject to certain federal securities laws.

The company also supported legislation applicable to the digital asset space currently under consideration by US lawmakers. The company said the Security Clarity Act, or SCA, would help provide regulatory clarity for cryptocurrencies. The SCA would change the legal status of any asset sold as an “investment contract” to an “investment contract asset.”

In addition, the Digital Commodity Exchange Act would supplement the SCA when securities laws would not apply to certain token projects. This essentially makes them more like goods from a regulatory standpoint. The proposed legislation could empower the Commodity Futures Trading Commission to oversee the cryptocurrency exchanges that deal with such commodities.

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To address communication between the public and private sectors, Ripple supported the Eliminate Barriers to Innovation Act That was introduced by Representative Patrick McHenry in April. The bill aims to clarify the role of the SEC and CFTC in the country’s efforts to regulate crypto. However, it would also require the two agencies to set up a working group focused on digital assets.

Ripple’s head of public policy, Susan Friedman, said:

“Developing an effective policy framework for cryptocurrencies will only be possible if there is clear communication and collaboration between private and public actors. That’s why we’ve proactively discussed the issue with regulators and members of Congress on a two-pronged basis […] as well as the kind of requirements industry regulators should be making.”


Ripple Executives Thinking About Leaving America

Ripple co-founders Chris Larsen, Garlinghouse and CTO David Schwartz have all expressed concern about America’s legal problems. Although the company’s current headquarters are in San Francisco, executives have previously hinted that they were exploring leaving the US behind for a “friendlier jurisdiction.”

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