Globally, the regulatory environment around cryptocurrency is still relatively ambiguous and uncertain. Many countries are trying to address this with some seeing higher levels of success than others, but the US remains a rather confusing place for cryptocurrency.
The notion of confusing and ambiguous cryptocurrency regulations was further highlighted when Ripple CEO Brad Garlinghouse was interviewed by CNN anchor Julia Chatterley, discussing Ripple’s regulatory hurdles in operating in the US.
Garlinghouse confirmed that only about 5 percent of his customer base, and those using XRP and Ripple products, reside in the US — the country where Ripple operates out of. He stated regulatory uncertainty as the main driver behind the lack of interest from US-based customers.
Uncertainty causing avoidance
Garlinghouse claimed that Ripple’s services are not as popular in the US due to the ongoing regulatory uncertainty around its associate token XRP:
“95% of our customers are non-U.S. customers, and only about 5% are here in the US And people say ‘You are a US company, why is that?’ One of the dynamics is that US companies are waiting for clarity, and that clarity emanates from the Securities and Exchange Commission.”
Part of the uncertainty comes down to the fact that XRP has never had a clear sign off from the SEC, one of the main bodies making decisions about the legitimacy of crypto in the US. The SEC in the past has given the green light to Bitcoin, and even Ethereum, but XRP remains off its list with some even claiming it is clearly a security.
“For us, around XRP and over 100 companies that are working with XRP getting that clarity, it’s very clear to me that XRP is being used by many companies as a currency. You had the US Department of Justice refer to XRP as a currency, you had FinCEN refer to XRP as a currency. But you haven’t yet had that clarity from the SEC,” the CEO said.
According to Garlinghouse, Ripple has had some issues with US customers concerned about the regulatory status of Ripple’s XRP-related offerings.
“Oftentimes when I’m speaking to customers, talking to them about our product that uses XRP in the payment flows, they will ask me about regulatory dynamics, and we have had customers saying ‘Look, until there’s clarity and regulatory frameworks, we’re going to hold off,’” the CEO said, adding, “Now that has not been the case because of the clarity and the certainty” in other countries like the U.K.”