Ripple has been making an argument via the Ripple.com blog that the time is now for crypto regulation, worldwide. Cryptocurrency investors, users, and developers have never seen eye to eye in terms of regulation. To some, cryptocurrency is a force outside of government control, one which would be ruined with too much intervention.

Ripple doesn’t agree. The company who first made it possible to buy XRP makes a compelling case that sensible regulation would actually provide a framework wherein cryptocurrency could innovate to its best potential. The current half-measures taken by governments like the United States’, they argue, keep the industry stuck in limbo.

We think there is some value in this perspective, so let’s take a closer look at some of the key reasons why Ripple is fighting for regulation, and at what these regulations might look like in real life.

Ripple’s Ideal Regulatory Framework for Crypto

Ripple believes that sensible regulation will lead to blockchain innovation to benefit the world

There’s one thing that almost every crypto enthusiast can agree upon: regulating cryptocurrencies as securities would be bad news for the industry. A classic example of a security is a stock. A stock is a tiny piece of a company. People who own stocks receive a certain percentage of company profits. People with lots of stock in a company might get a seat at the board, or other privileges. Securities are powerful financial assets – and for this reason they are strictly regulated.

If a cryptocurrency was legally regulated as a security, fundraising tools like ICOs would be gone forever, or they would be altered to the point of being unrecognisable. Tax burdens would be heavy on crypto investors, and it would become practically impossible to use a cryptocurrency like Bitcoin as money. The American Securities & Exchange Commission has ruled that Ethereum is not a security, and Ripple hopes to receive the same treatment.

Assuming that world governments agree that Ripple is not a security, what would it be instead? Well, Ripple wants the world to understand cryptocurrency as a novel asset class, one with its own unique features, and deserving of a brand new regulatory framework.

To identify the way such a framework could take shape, Ripple points our attention to Japan, Abu Dhabi, and Thailand. Thailand used to have a fairly strict regulatory burden for cryptocurrencies, and blockchain technology did not flourish there. Then, Thailand realized that it might be missing out on a vital ingredient in its economy’s healthy future. Consequently, the government reworked its regulations to make Thailand very friendly for blockchain development – and new business, technology and jobs have started to flourish.

Abu Dhabi was never hostile to blockchain. Instead, they went from having no real regulations to speak of to creating highly beneficial ones, at least as far as blockchain is concerned. Now, throughout the United Arab Emirates, there is great anticipation that blockchain technology will transform the country. In fact, Dubai plans to be making 50% of all its financial transactions by blockchain and crypto by the year 2020. It’s this attitude that is leading Ripple to set up a new office in Dubai, and one which could see many other blockchain companies moving into the futuristic Middle Eastern metropolis.

We agree with Ripple that regulators will do their countries a favor by creating laws that give liberal rights to blockchain companies, and the currencies and tokens which they introduce to the marketplace. Blockchains make it easy to move money and information across borders, so countries that are harsh toward blockchain will see innovators simply heading for friendlier regulatory environments.

It would be a shame for powerful nations like the United States and China to miss out on the best of blockchain innovation simply because their regulations were too strident toward this new industry sector. When an industry is clearly defined and not overly burdened by regulation, industry innovators can create new solutions to social and technological problems. Many of these benefits cannot be anticipated before they’re experienced.

This is asking for somewhat of a leap of faith for governments not yet friendly to crypto. But we live in a world where the industry is developing so fast in certain corners that all nations are likely to see the benefit of blockchain sooner or later. The world economy has been recovering from the 2008 financial crisis for more than a decade. We’re all looking for the next boost that will stave off recession. Blockchain may or may not provide this economic fuel, but friendly national regulation like Ripple describes will give it every opportunity to make good on this potential.

The post Why Is Ripple Pushing So Hard For Regulation? appeared first on The Independent Republic.

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source: https://theindependentrepublic.com/2018/11/23/why-ripple-pushing-hard-regulation/