XRP’s Arrival on Coinbase Fuels Even More Controversy and Confusion

Coinbase has announced the availability of XRP trading on its professional platform in the U.S. (excluding New York), European Union, Canada, Singapore, and Australia — with additional jurisdictions being added later.

When XRP?? Now! XRP/USD, XRP/EUR, and XRP/BTC order books will soon enter transfer-only mode, accepting inbound transfers of XRP in supported regions. Orders cannot be placed or filled. Order books will be in transfer-only mode for a minimum of 12 hours. https://t.co/MWUtUm4wRh

— Coinbase Pro (@CoinbasePro) February 25, 2019

XRP: The Standard Centralized Coin?

XRP has always been a polarizing topic of discussion within the cryptocurrency community. On one side, it is lauded by its loyal supporters — often labeled the XRP Army — as a solution to Bitcoin’s scalability and transaction speed issues. On the other side, cryptocurrency advocates view it as a centralized “banker’s coin” that should not be part of the movement started by Bitcoin (BTC). Among the ardent supporters of decentralization, XRP has had its reputation tarnished. The community sees the cryptocurrency as an intruder in the ecosystem, representing all the problems of centralization and the current financial system in the guise of a cryptocurrency. This is primarily because XRP is built on a ledger infrastructure which is mostly managed by the Ripple company and has a centrally controlled mechanism for coin emission. Brian Armstrong, currently CEO of Coinbase, previously voiced his doubts over the viability of Ripple (which recently transitioned to XRP). As Coinbase has made aggressive expansion as its top priority, it seems that the co-founder and CEO has also had a change of heart. https://twitter.com/brian_armstrong/status/569914763263606785

Coinbase’s Digital Asset Framework

Maybe something changed about XRP to warrant a spot among the few select digital assets available on Coinbase. One of the key principles in Coinbase’s Digital Asset Framework is that the network should be public, decentralized, and enable trustless consensus. Despite Ripple continuously claiming that XRP is fully-decentralized, this is widely contested within the community. Therefore, XRP still remains one of the more centralized cryptocurrencies — according to experts and enthusiasts alike. This leads to another set of problems that Ripple and XRP have had to battle with — clarification over whether XRP classifies as a security or not. Should XRP be classified as such, it would heavily impact its attractiveness to investors and exchanges, as securities are subject to significantly stricter regulations. Moreover, Coinbase has an explicit requirement that any digital asset that gets to be listed shouldn’t be classified as a security under the exchange’s Securities Law Framework. While Ripple and XRP have a massive following and have been able to build a rapport with a number of financial institutions, the latter still remains a centralized digital currency with the risk of being classified as a security. [bctt tweet=”Considering the lack of a clear response from officials regarding XRP’s status, is Coinbase willing to bet on the legitimacy of the digital assset?” username=”beincrypto”] Trading XRP might represent a huge business opportunity for any cryptocurrency exchange, but Coinbase appears to be simply failing to follow its own rulebook for listing digital assets. Furthermore, with the CEO dismissing Ripple and other similar altcoins in the past, the announced listing is a complete departure from that position. As such, can users even trust Coinbase’s digital asset framework when there is no consistency in their vision and decisions? What is your opinion on Coinbase listing XRP? Is Coinbase tarnishing its own reputation by not following its framework? Or is there some regulatory clarity around XRP that is soon to surface in the public realm? Let us know your thoughts in the comments below! 

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