In the absence of clear progress by the US authorities regarding the regulation of bitcoin (BTC) and other cryptocurrencies, the Ripple company took a step forward and presented its own framework, which proposes rules to, among other things, give it greater « clarity ‘to the ecosystem.
It was in his Web page where they showed the offer of the regulatory framework, highlighting that for that they met with regulators and legislators of the United States Congress (USA), under the premise of a “Public-private partnership” that would lay the foundations for regulation.
The interesting thing is that this framework involves using existing laws and projects, which would serve, they say, to give ‘regulatory clarity’ to the cryptocurrency industry.
In Ripple they defend that any legislation or policy framework intended to regulate cryptocurrencies “Should promote an active dialogue between regulators and market participants”. In the opinion of this company, public-private collaboration “will lead to more adapted and effective political results” for both industry and consumers.
For that dialogue, Ripple defends the Law for the Elimination of Barriers to Innovation, a project that, according to the company, requires the establishment of a collaborative working group, made up of persons appointed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well as representatives from fintech companies, finance firms and small businesses.
The regulation is something also defended by the centralized exchange (CEX), Binance, which in a statement indicated that it is seeking to establish a global regulatory framework on bitcoin and cryptocurrencies in general so that the industry continue to grow in an egalitarian, responsible and organized way in the world.
As reported by CryptoNews, Binance considers that the regulation of cryptocurrencies is inevitable. The growth of the industry makes states want to control it, so Changpeng Zhao, the founder and director of the company, wants to get involved in this process.
Adapt to bitcoin
Following on from the idea of the framework, Ripple states that there are existing financial regulation proposals and under discussion in Congress, that can be adapted to bitcoin.
The first is the Security Clarity Law (SCA), which among its articles classifies cryptocurrencies as “Investment contract assets”, which should be considered separate and distinct from any offer of securities of which they may have been a part.
The second is the Digital Commodity Exchange Law (DCEA), which is complementary to the SCA. This, according to Ripple, seeks to create a federal definition of “Digital commodity exchanges” and attributes to the CFTC the authority to record and monitor them, similar to the requirements of commodity derivatives markets.
“The SCA and DCEA seek to work within existing and well-understood financial regulatory frameworks, but adapt them for the innovation represented by cryptocurrencies and blockchain,” defends Ripple.
Both initiatives were presented to the United States House of Representatives. The SCA yesterday, November 16, as shown on the Congress page. The DCEA was in March 2020.
Promotion of sandboxes
Meanwhile, the company was a defender of the promotion and encouragement of digital sandboxes or sandboxes. For them, in order to encourage a “coherent regulatory framework”, it is necessary to target these initiatives where financial institutions and services linked to cryptocurrencies converge.
US financial regulators should encourage the creation of a “safe harbor” regime under which network developers can launch their products and develop their networks for a limited period of time without having to comply with federal laws. of securities, provided certain conditions are met. Innovation sandboxes are an excellent example of how public-private collaboration could form the basis of rational regulation.
Conversations with regulators and congressmen
As stated, Ripple members turned to regulators and members of Congress to come up with this regulatory framework. According to the company’s director of public policy, Susan Friedman, the effectiveness of this instrument is possible only with communication and collaboration with public and private.
“That is why we have proactively discussed the issue in a bipartisan way with regulators and members of Congress,” he said. “These conversations have helped shape our perspective on the kind of regulatory clarity that industry and the broader ecosystem need from regulators, as well as the kind of requirements that regulators must place on the industry.”
For Ripple, the US financial markets are considered in the world as first class, something due, in part, by the regulatory framework by which they are governed.
Thus, they express: “we believe that the framework, adapted to take into account some of the unique and inherent attributes of cryptocurrencies, can provide the clarity that innovators seek and the market protections that consumers deserve.”
According to the company, each of these proposals seeks to give “regulatory clarity” to bitcoin and other crypto assets, thus motivating innovation and growth of the industry in the United States. This, coupled with “strong protections” for consumer and investor.
For Ripple CEO Brad Garlinghouse, the regulatory framework they propose is a “three-pronged approach” to what can be done now in order to bring clarity to the industry. “It is also the result of our direct interactions with bipartisan regulators and legislators,” he added..
“The cryptocurrency industry is preparing for public-private collaboration on policy, without a doubt, and we will continue to seek to work together on the optimal path forward,” Garlinghouse concluded on his Twitter account.
Before, and in the official publication, the manager expressed that the technology of cryptocurrencies and the blockchain «need regulatory frameworks and clear licenses designed to address and remedy the specific challenges of our industry.
“All of the proposed measures discussed in this framework are aimed at bringing legal clarity to industry, markets and consumers in a way that a regulation-by-enforcement approach simply cannot,” he said.
At the moment, both projects have not advanced beyond the Chamber, but they are options that seek to regulate the operation of the cryptocurrency industry and that can be taken into account before the silent authority, even though it is known that, in the end, they seek to limit the ecosystem.