One of the things holding Ripple XRP back from market dominance is its failure to appear on major exchanges. Some even argue that Ripple missed out on the end of 2017 boom as a result of not being easily accessible through US cryptocurrency exchanges like Coinbase.
Bloomberg have today reported that ‘Ripple has tried to buy its way onto major exchanges for cryptocurrency’.
First of all, I’m not so sure why this is a headline, we have already established that currencies do pay a few to join an exchange, in fact I reported on it very recently (https://cryptodaily.co.uk/2018/04/much-actually-cost-list-currency-exchange/), either way though, people are taking about what Bloomberg have had to say.
According to Bloomberg, ‘Ripple has a problem’ they say:
“The start-up (Ripple) controls the world’s third-largest cryptocurrency, XRP. Banks have signed onto its network and bought equity stakes in its business, which wants to rewire how money moves around the world. And yet when it comes to obtaining a coveted listing for XRP on two of the top U.S. cryptocurrency exchanges, Ripple hasn’t been able to close the deal.”
Here, they are questioning why Ripple have not made it onto some major exchanges, yet believe they are the future for cross border transactions. Rightfully, Bloomberg seem to believe that if Ripple was listed on Gemini, Coinbase et al. then the value of XRP would be very different today.
However, according to Bloomberg, the uncertainty regarding Ripple and XRP’s status as a ‘security’ is the reason that Ripple have failed to make it onto the major US exchanges, despite allegedly offering one exchange £100million worth of XRP in what can only be seen as a very generous tip towards getting Ripple on a major US exchange.
If XRP became a ‘security’ then it would be treated in a similar way to a stock and therefore would be allowed onto a US exchange (and would be expected to pay for the honour) however if XRP is still deemed as an ‘unregistered security’ and thus retains its being as a cryptocurrency, over a stock, then it would be illegal for XRP to appear on a US exchange, leaving both sides in a bit of a financial pickle.
According to Bloomberg; “The U.S. Securities and Exchange Commission has said that platforms serving as trading venues for digital assets deemed to be securities will need to register with the agency as a national exchange or qualify for an exemption”.Therefore, Ripple may have backed themselves into a corner with XRP.
There are advantages and disadvantages in Ripple registering with the US Securities and Exchange Commission, yes indeed if they do, they will become a part of a US exchange, opening up an entire new market for trading, but in the process, they may lose a lot of the rights they have worked so hard to maintain, the rights that resonate around cryptocurrency markets. Maybe even doing this would actually cause people to start backing away from Ripple?
Dave Weisberger, the CEO of CoinRoutes sums up this predicament perfectly:
“In the equity space, listing fees have always historically been coupled with the notion of regulation,” while digital currencies are relatively unsupervised.”
It’s a tricky situation to be in. With the markets looking bleak at the moment, Ripple could do with getting some value behind them. Bloomberg seem to thing that entering a US exchange is the best way to do this but I guess Ripple feel the same as I do, is it really worth it if in doing so, they will be backing away from their own hard work and investors who have put their time, effort and money into supporting them?