Brad Garlinghouse, the billionaire CEO at Ripple Labs, the firm he manages the development of XRP, the $18 billion blockchain network, has for the very first time expressed in public that Coinbase should incorporate XRP, the native cryptocurrency of the Ripple network.
During an interview with Jeff John Roberts from Fortune at CB Insight Future of Fintech conference in New York, Ripple CEO Brad Garlinghouse noted that XRP is handling issues at scale for firms and large-scale banks, and Coinbase should consider being part of it.
“As we solve problems at scale for institutions, I think it’s in Coinbase’s interest to participate in that,” said Garlinghouse, adding that XRP is clearly not a security.
Garlinghouse stressed that XRP operates outside of Ripple and even if the firm Ripple Labs becomes unsuccessful, XRP would independently survive as a cryptocurrency. Besides, Garlinghouse stated that XRP tokens have a technological aim of handling transactions between firms and individuals as a utility currency, contrast from stocks and traditional securities.
“I think it’s really clear that XRP is not a security. XRP exists independent of Ripple and it would operate even if Ripple Labs failed,” said Garling house. “I don’t think that our ownership of XRP gives us control. Saudi Arabia owns a lot of oil that doesn’t give them control of oil.”
The similarity of Garlinghouse about Saudi Arabia and its control over oil is in connection to the consensus algorithm of XRP. In contrasts to protocols such as EOS that use a proof-of-stake (PoS) consensus algorithm and provide holders of the tokens more control over the network than others, XRP utilizes its individual protocol consensus algorithm.
Even though the point of view Garlinghouse are rational and logical, they remain to be the opinion of the company and not an official explanation from the US Securities and Exchange Commission (SEC).
Chris Concannon, the president of the Chicago Board Options Exchange (Cboe), who is still confident in the long-term growth of the cryptocurrency market last week stated that the US SEC will pursue both investors and distributors of tokens if the SEC creates tokens that can be termed as securities.
“The reckoning will come in two waves. First, the SEC will go after ICO market participants. Then, class-action lawsuits against the teams behind ICO projects will surge. The actual party that offered the unregistered coin, they could have been involved in issuing an unregistered security. Anyone who sold that off could be deemed an unregistered underwriter. If you sold someone an unregistered security you are liable to them if they decide to take them to court,” Concannon said.
Hence, even though it is next to impossible, if Coinbase adds XRP and the currency becomes a security under US laws, both Coinbase and XRP traders on the exchange are liable and can face charges as unregistered security distributors.
Therefore, Coinbase will possibly bot add XRP unless the SEC provides an official clarification that XRP is not a security, with definite certainty.