Its August 2018. Ripple have certified that their currency, XRP is a cryptocurrency not bound to them by rebranding XRP, as XRP. Ripple are riddled with lawsuits and Coinbase still won’t list XRP.Why, what is going on?As Brave New Coin rightly put it, this is a case of ‘Incompatible Ideologies’ and I think this is a statement that sums up the issue pretty well.Why is an XRP listing important for Coinbase?Well, just look how the listing of Bitcoin Cash treated Bitcoin Cash and look how the recent announcement of an Ethereum Classic listing treated Ethereum Classic. XRP is the third biggest cryptocurrency in the world, but still isn’t listed on one of the world’s major exchanges. Therefore, a Coinbase listing isn’t just important for the value of XRP, its important for the reputation of Ripple, and the value of Ripple on the whole. So, why’s it not listed?Back to the point about incompatible ideologies. According to Brave New Coin:
“The technical structure of XRP runs counter to the ethos of decentralisation—incorporating central governance, a large pre-mine, and a significant allocation of tokens to its founders.Along with infuriating the diehards, some aspects of this structure have prevented the cryptocurrency from infiltrating the top exchanges, even with an incentive. Ripple reportedly offered Coinbase a loan of over $100 million in XRP in exchange for a listing, but this wasn’t enough to sway them.”
See more for yourself, here. So, this can then be spun off into two separate issues, these are the issues that are being used to justify the blocking of this listing. RegulationIn terms of financial law, XRP looks a little bit like a ‘security’ as a result of Ripple’s ownership of an amount of XRP. In order to list a security, an exchange is subject to a whole host of crippling regulations. Now XRP isn’t classified as a security yet, but Ripple are within court proceedings that could in turn cause XRP to be classified as a security. If this happens, any exchanges that list XRP will have to adapt to new regulations, or otherwise they will have to delist XRP. Until this debate is settled then, why would Coinbase list XRP, if they only have to get rid of it in the end anyway?DecentralisationThis sort of follows the pattern of the regulation issue, however focuses more on the control Ripple have over the XRP framework, as opposed to their actual ownership of XRP tokens being called to question. According to Brave New Coin:
“Despite Ripple’s adamant claims that XRP is fully decentralised, this is widely contested within the community, as the company arguably exercise singular control over the XRP ledger.This centralization could be one of the key problems preventing XRP from getting listed, a thesis supported by the fact that Coinbase recently announced it is considering listing Stellar (XLM), which was initially based on Ripple’s codebase, but is now far more decentralized.”
As it can be argued that XRP isn’t fully decentralised, it makes it harder for Coinbase to justify a listing.These are hurdles that XRP can overcome, and it no doubt will overcome them too. It is only a matter of time. With regards to regulation, its most likely that XRP will not be deemed a security and then Coinbase can go ahead and list just fine. Decentralisation is an issue that Ripple need to address themselves, though, this does seem to be a part of the bigger picture within Ripple’s plans.