Former Ripple CEO and co-founder Chris Larsen recently spoke out his mind on crypto regulations in the U.S. and the lack of clarity. Speaking to the Fortune reporter Jeff John Roberts, Larsen said that excessive regulations have been hurting innovation. Thus, they are planning to move the Ripple headquarters from San Franciso to other crypto-friendly jurisdictions.
— The Cryptic Poet (@1CrypticPoet) October 6, 2020
Although the decision is not final yet, Ripple cited moving to other democratic countries like Singapore and the U.K. He noted that countries like Singapore, Japan, the U.K, and Switzerland are becoming the fintech centers. Larsen noted that the hostile attitude of the U.S. lawmakers suggests that “digital currencies are not welcome in the U.S.”
The former Ripple CEO specifically blamed the U.S. Securities and Exchange Commission (SEC) for thwarting innovation. The SEC’s long-going battle about Ripple’s XRP cryptocurrency’s ‘security’ status has got the blockchain company frustrated.
The SEC’s strong-headed actions on digital currencies have discouraged companies from innovating further. Its major crackdown on Facebook’s Libra caused the social media giant to move the base for the Libra Association to Switzerland. The pro-crypto SEC Commissioner Hester Pierce, also popular as the crypto mom, has also warned the regulator for being hostile towards crypto innovation.
SEC’s crackdown on crypto investment vehicles like ETFs has also prevented financial giants from floating Bitcoin-ETFs to the market. However, SEC Chairman Jay Clayton recently said that he is open to having crypto-ETFs provided they fall in the ambit of the law.
Losing the Tech and the Financial War to China
Innovation in the FinTech space has gathered massive pace in the last few years and China is looking to seize every opportunity its way. Larsen warned that China is on the verge of launching its Digital Yuan and the U.S. is nowhere close to it. If this continues, the U.S. could soon be losing its financial leadership position to the Dragon.
Although we have been hearing of the Digital Dollar from the U.S. lawmakers recently, they are still just surface levels talks. When it comes to the implementation and testing of the Digital Dollar, the U.S. seems to be far-behind China. Forget China, even Europe seems to be ahead of the U.S. in digital currency developments. The European Central Bank (ECB) has recently applied for the Digital Euro trademark and accelerated the development with its pan-Europe CBDC.
Hopefully, the U.S. rises to the occasion and creates a framework that creates a healthy, safe and innovation-boosting atmosphere for crypto companies to operate.