Ripple CEO Brad Garlinghouse says a lack of regulatory clarity on crypto assets other than Bitcoin and Ethereum is preventing companies from using emerging payments technologies.
In a new interview on CNN, Garlinghouse says Ripple’s US customers are largely steering clear of using On-Demand Liquidity (ODL), which uses the digital asset XRP to move money across borders.
“Oftentimes when I’m speaking to customers and we’re talking to them about our product that uses XRP in the payment flows, they will ask me about the regulatory dynamics. And we have had customers say until there’s clarity and regulatory frameworks, we’re going to hold off.
That has not been the case because of the clarity and the certainty in countries like I mentioned, like the UK or the UAE or Switzerland. You do have companies in those markets saying absolutely, we’re supportive. Let’s move forward.”
Garlinghouse says despite the fact that Ripple is headquartered in San Francisco, the vast majority of its customers are actually overseas.
“95% of our customers are non-US customers and only about 5% are here in the US. And people say, well you’re a US company, why is that? One of the dynamics is, we have US companies who are waiting for clarity and the clarity really emanates from the Securities and Exchange Commission (SEC). The US SEC said almost three years ago that Bitcoin is not a security and then they came out about two months later and they said Ether is not a security. And then they stopped and instead focused their energy on some of the bad actors in the ICO market.”
Garlinghouse says he’s looking for the SEC to turn its attention back to analyzing top crypto assets and determining their regulatory status.
“For us, around XRP and the over 100 companies that are working with XRP, getting that clarity and that certainty [is important]. It’s very clear to me that XRP is being used by many companies as a currency. You’ve had the US Department of Justice refer to XRP as a security. You’ve had FinCEN (Financial Crimes Enforcement Network) refer to it as a security, but you haven’t yet had that clarity from the SEC.”
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