The American fintech company Ripple has presented the concept of regulating the crypto industry. Thus, the document is intended to offer the US authorities an “immediate and pragmatic” way to create a regulatory framework.
According to Ripple CEO, Brad Garlinghouse, the purpose of the proposal is to provide legal clarity for the industry, markets and consumers in such a way that regulation through enforcement measures is simply impossible.
In a document entitled “A Real Approach to Cryptocurrency Regulation”, the company identified three main principles.
Cooperation is the key
Firstly, Ripple believes that any legislative proposals should be based on cooperation between the state and business. “We believe clear communication and collaboration between private and public actors will be key in developing an effective policy framework for cryptocurrencies”. Said Susan Friedman, head of the company’s public policy department.
Secondly, the firm believes that in order to regulate cryptocurrencies, it is possible to adapt the current legislation for the financial sector. “We believe that framework, as adapted to account for some of the unique attributes inherent to cryptocurrencies, can provide the clarity innovators seek,” the document says. Its authors named two legislative acts that, in their opinion, aim at achieving this goal. We are talking about the laws “Securities Clarity Act” and “Digital Commodity Exchange Act”.
Thirdly, the company believes that in order to develop a regulatory framework; financial regulators should support the creation of a cryptocurrency sandbox regime. This will allow projects to launch products and develop networks; during the grace period without having to comply with federal securities laws, Ripple stressed.
Regulating crypto industry
Earlier in December 2020, the regulator filed a lawsuit against Ripple. Accusing the company of selling unregistered securities in the form of XRP tokens worth $1.3 billion. At the time of writing, the trial in the case is not over.
In October, a member of the House of Representatives, Patrick McHenry, introduced a bill on regulatory holidays for crypto projects. Moreover, his initiative echoes a similar proposal by industry-friendly SEC Commissioner Hester Pierce.
Recall that previously in November, Binance, the world’s largest Bitcoin (BTC) exchange, published its principles for regulating the crypto industry.