Ripple Embraces U.K FCA’s Digital Asset Guidelines, Asks for An Update of ‘Outdated Laws and Rules’
Ripple touts U.K FCA’s Digital Asset guidelines, highlighting that other countries should update the laws and rules for digital assets.
In a blog post penned by Michelle Bond, Ripple’s Global Head of Government Relations, the firm commended FCA’s guidance which defined the crypto asset activities that are to be regulated. According to FCA’s press release, XRP, Bitcoin, and Ethereum are digital assets. The three are considered exchange tokens, and they do do not fall under the authority’s “regulatory perimeter.”
The World of Digital Assets and Blockchain Needs a “Consistent Language and Regulatory Approach”
As a response, Michelle Bond’s blog post highlighted that, just like everyone around the world knows how to play a game of pickup basketball and the core rules, the world of digital assets and blockchain should have a “consistent language and regulatory approach.”
However, the new technology lacks consistent frameworks, said Bond, explaining that “many financial players and companies will continue to rely on outdated laws and rules.”
However, other countries should take example from U.K’s FCA’s actions:
“Businesses need this clarity on classification. […] Similarly, governments require clear guidelines in order to recruit new companies and promote emerging technologies that can lead to job gains and tax revenues.”
By issuing these classifications, the FCA makes it clear to companies which digital assets fall inside its ‘regulatory perimeter.’ Put another way, the FCA has demonstrated which types of tokens will be regulated as securities and which will not. The FCA has also made the framework flexible to account for evolutions in technology because it acknowledges that digital assets can move between classifications over time.”
Ripple asks the US and other countries to offer similar guidance, Bond naming countries like Switzerland, Abu Dhabi, Thailand and Singapore that are friendly to blockchain technology.
“Blockchain Technology Is Here to Stay” – But It Needs Clear Frameworks to Thrive
As a parallel to these needed regulations, Bond named the evolution of early Internet regulation, recalling how the old framework written for rotary phones and transistor radios was used until the late ‘90s. With Clinton’s Framework for Global Electronic Commerce, global commerce on the internet grew and the significant part of this framework was that it recognized the differences between industries.
Thus, Bond calls for regulations that distinguish tokens and their functions. It is essential institutions know the difference between technologies, and accept that they need different sets of regulations, explained Bond, adding that:
“Countries that take the lead on these frameworks will be better positioned to attract capital, companies and jobs – particularly since blockchain technology is here to stay. Regions that have unclear guidelines should establish their own frameworks to remain competitive and avoid losing companies to better regulated markets.”
This uncertainty in the regulatory climate would make countries lose companies, and also fails to protect costumers.
“Ultimately, the FCA’s guidelines can serve as an example framework for other countries, providing the much-needed regulatory clarity that will allow digital assets and blockchain to thrive,” concluded Bond.
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.