Amid its ongoing dispute with the SEC in the United States, Ripple is seeking to make breakthroughs with lawmakers in the United Kingdom. Ripple created the XRP ledger, a distributed network powered by the XRP coin. The company has released a new regulatory whitepaper in advance of expected changes to the UK’s Financial Markets and Services Bill, which will outline the country’s crypto regulatory framework.
On July 20, 2022, the bill was submitted to the British Parliament, which voted earlier in October to include more features controlling crypto legislation. The core of Ripple’s recommendations is to establish “a clear legal framework that distinguishes between different types of crypto asset activity,” guided by their unique risk profiles, which Ripple claims might vary significantly.
The crypto company believes that future law should “clearly distinguish” consumer-facing and purely business-supporting propositions. According to the study, cryptocurrency companies should be regulated differently based on “the extent of interconnection with the rest of the economy and hence the potential risk they pose more broadly.”
In addition, the company’s whitepaper explained how each blockchain has a different environmental effect depending on how it mines tokens and validates transactions, comparing tokens based on proof-of-stake (PoS) and proof-of-work (PoW) blockchains.
Ripple’s XRP coin employs a Proof-of-Consensus (PoC) mechanism in which a network of “unique nodes” agree on which transactions may be processed in the network, with a minimum consensus of 80% required. Ripple has claimed that XRP is a more ecologically friendly solution than Bitcoin’s energy-intensive PoW consensus algorithm.
Ripple’s whitepaper also suggests that the UK follow the lead of other jurisdictions that have already built legislative frameworks that Ripple believes would help them become “attractive hubs” for the crypto asset business, such as Singapore, Dubai, and the EU.
Ripple wrote that the UK should create its “own unique regulatory framework” to strengthen its crypto-asset industry based on these different systems. A structure like this will give certainty and support to crypto firms as they expand while fostering trust among the general public.
Furthermore, the whitepaper stated that there is an “urgent need” to increase education in the crypto asset market “at all levels of society,” rejecting the present political discussion of cryptocurrency in the UK as a “punchline and political football.”
Ripple has spent most of the last two years dealing with its regulatory concerns. The ongoing lawsuit focuses on whether the XRP cryptocurrency, used mainly for cross-border payments, may be classified as a security subject to different regulations and limitations.