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- Ripple is considering migrating its headquarters to the United Kingdom, citing regulatory clarity on the digital asset XRP.
- Singapore, Japan, Switzerland, and the United Arab Emirates are also on the list of countries Ripple is considering to migrate.
In an interview with CNBC, Ripple‘s CEO Brad Garlinghouse offered more details about the possible migration of the company’s headquarters outside the United States. Garlinghouse reiterated that the main cause of migration is the lack of regulatory clarity in the United States. The company is considering many options for migrating its headquarters.
The most attractive seems to be the United Kingdom. According to Garlinghouse, the Financial Conduct Authority (FCA) does not consider the XRP digital asset to be a security. A matter that is paramount to Ripple. The CEO of the payment solutions company stated:
What you see in the U.K. is a clear taxonomy, and the U.K.’s FCA took a leadership role in characterizing how we should think about these different assets and their use cases. The outcome of that was clarity that XRP is not a security and is used as a currency. With that clarity, it would be advantageous for Ripple to operate in the U.K.
Garlinghouse has been very critical of the stance taken by the US and its regulators. In addition, it claims that the country and its innovators are losing ground to China by putting themselves at a disadvantage by not having a more open regulation towards cryptocurrencies and blockchain technology. Ripple’s CEO confirmed that Singapore, Japan, Switzerland, and the United Arab Emirates are also under consideration.
The US is out of sync with other G20 markets – it’s critical for @Ripple to have a level playing field in order to compete on a global stage. The UK, Singapore, Japan, Switzerland and UAE are at the top of our list because they’re providing clarity and consistency. https://t.co/lPizOi6UIg
— Brad Garlinghouse (@bgarlinghouse) October 22, 2020
The background behind Ripple’s decision
After Ripple co-founder Chris Larsen gave an interview to Fortune magazine, rumors about Ripple’s migration gained further momentum. The company has invested time and effort in promoting a clear and strong regulatory framework for the crypto industry in the United States. In 2019, the company established an office in Washington to work more closely with politicians and institutions with that goal in mind.
In parallel, the payment solutions company is facing a lawsuit with some early investors accusing it of making an illegal sale of a security in violation of the law. If regulators in the United States classify XRP in this category, the company could lose the lawsuit and could be forced to pay the plaintiffs. In addition, XRP’s digital assets may have to follow more stringent rules. A portion of Ripple’s profits is earned through the program sale of an amount of XRP.
In early October, the U.S. Department of Justice (DOJ) released a report on cryptocurrencies. There it recognized the potential associated with this asset class, but also the “exceptionally dangerous threat to public safety”. Ripple’s CEO had this to say about the report:
An 70+ page contradictory report is not regulatory clarity — many responsible private players are trying to follow the rules, but that becomes increasingly hard when there’s no single arbiter of the law.
