A senior Ripple official has called on British regulators to revisit their ‘wait and see’ approach to cryptocurrencies and called for new rules introduced by the likes of Japan.
While cryptocurrencies are commonly seen as financial instruments meant to circumvent governmental controls or oversight from central banks, Ripple (XRP) – the world’s third-largest cryptocurrency with a market cap of over $26 billion at press time – has called on the UK government to step in and set rules for the crypto sector.
As reported by The Telegraph, Ripple’s head of regulatory relations Ryan Zagone called on regulators for focus on three “pillars”, namely consumer protection, financial stability and anti-money laundering while drafting and delivering regulations that sustains a balance between “capturing risk and enabling innovation.”
Comparing the current regulatory environment to the early days of the internet, the Ripple official was quoted as stating:
We’re at that time now where we need more clarity and rules and we need more certainty. It’s a good time to start revisiting that ‘wait and see’ approach taken by regulators.”
For years, the United Kingdom’s pro-innovation policies have been broadly supportive of blockchain technology and cryptocurrencies despite calls for regulatory oversight and clampdowns on cryptocurrency usage. London is commonly seen among the world’s leading Fintech hubs.
Still, the UK could take a cue from Japan which has been a “leader”, Zagone says, in creating a regulatory setup that saw bitcoin recognized as a legal method of payment last year following a revision of its ‘Payments Services Act’. Under new laws, domestic cryptocurrency exchanges in Japan are mandated to register with the country’s financial regulator and gain a license to operate a domestic exchange trading platform.
Regulation, Zagone argued, is key to help the market mature and rope in new entrants to the cryptocurrency sector. This has certainly proved true in the case of Japan wherein the likes of banking giant SBI and internet powerhouse Yahoo Japan are operating and owning a stake in domestic cryptocurrency exchanges, respectively. $9 billion-valued messaging giant Line, with over 600 million registered users, has also filed an application with Japan’s regulator to open its own crypto exchange.
Ripple’s Zagone added:
Regulation creates the guardrails on the highway that allows new entrants to come in, particularly institutional investors.
The UK, meanwhile, is undertaking a number of initiatives to better understand and perhaps even regulate cryptocurrencies soon in the future.
The UK Treasury Select Committee, a powerful group of cross-party politicians and MPs, launched an inquiry into cryptocurrencies for lawmakers to educate themselves on cryptocurrencies before drafting any policies for space.
“It is time that Whitehall and Westminster understood cryptocurrency better, and thought more clearly about the policy environment for blockchain technology,” said Committee member Alison McGovern in February.
In March, the UK’s Chancellor of the Exchequer Philip Hammond announced a new ‘Cryptoassets Task Force’ consisting of the Bank of England, the Financial Conduct Authority and Her Majesty’s Treasury to study the risks and benefits of cryptocurrencies.