Ripple founder Brad Garlinghouse has revealed that the company is considering moving its headquarters from San Francisco to London.
Speaking to CNBC on Oct 23, he stated that the decision is due to the difference in both countries’ regulatory environments.
The U.S. Securities and Exchange Commission (SEC) has not adopted a concrete position on whether it views XRP as a security or a currency. This is compounded by an ongoing legal battle between Ripple and several crypto investors who contend that its XRP sales amount to unregistered securities.
$10 billion crypto firm Ripple considers relocating to London over U.S. regulation https://t.co/ZhIpjvhusV— CNBC (@CNBC) October 23, 2020
“U.K. Offers Clear Taxonomy”
Garlinghouse believes that the position of the UK’s Financial Conduct Authority (FCA) on XRP is clear and advantageous enough to warrant a possible relocation to London.
The FCA currently classifies XRP as a currency instead of a security, which is especially important given that Ripple’s entire use case for XRP would be compromised if it were classified as a security.
Explaining his preference for the British regulatory environment to CNBC, Garlinghouse explained:
“What you see in the U.K. is a clear taxonomy, and the U.K.’s FCA took a leadership role in characterizing how we should think about these different assets and their use cases. The outcome of that was clarity that XRP is not a security and is used as a currency. With that clarity, it would be advantageous for Ripple to operate in the U.K.”
Speaking at the L.A. Blockchain Summit on Oct 6, Ripple co-founder Chris Larsen earlier alluded to Garlinghouse’s frustrations when he revealed that the company is considering moving to Singapore in an effort to get away from its American regulatory quagmire.
According to Garlinghouse, other jurisdictions in contention to become Ripple’s new global base of operations apart from the UK and Singapore include the United Arab Emirates, Switzerland, and Japan.
The US is out of sync with other G20 markets – it’s critical for @Ripple to have a level playing field in order to compete on a global stage. The UK, Singapore, Japan, Switzerland and UAE are at the top of our list because they’re providing clarity and consistency. https://t.co/lPizOi6UIg— Brad Garlinghouse (@bgarlinghouse) October 22, 2020
Ripple’s XRP Regulatory Headache
Ripple has made no secret of its aim to provide an alternative to the SWIFT network for international settlements using XRP on a superfast decentralized ledger technology (DLT) framework.
If XRP were to be classified as a security, that would bring it under the SEC’s regulatory purview – and potentially wreck XRP’s principal use case.
While Ripple already works with financial giants like American Express and Santander, none of them currently uses its XRP settlement solution. Garlinghouse famously predicted in 2018 that by 2019, XRP would be a mainstream product in use by “dozens of banks.”
This has largely not panned out despite some transfer with money transfer services, and Garlinghouse believes that this is down to the regulatory snafu, which spooks potential clients away. Speaking to CNBC, he said:
“Because of the lack of clarity about some of these regulations, we have customers who don’t want to publicly talk about what they’re doing.”