On July 17, 2024, Ripple Labs CEO Brad Garlinghouse appeared on Bloomberg Television’s “Bloomberg The Close” to discuss how the 2024 US presidential election could influence the cryptocurrency market. The conversation explored various aspects, from regulatory clarity to international competition in the crypto space.
Cryptocurrency and Partisan Politics
Garlinghouse began by emphasizing that the issue of cryptocurrency regulation should never have become a partisan one. He believes that all political parties should embrace technological innovation, given its potential to transform financial transactions by reducing costs and improving efficiency. He expressed frustration over the lack of regulatory clarity in the United States, highlighting that this has been a long-standing issue since before Ripple was sued by the U.S. SEC.
The Regulatory Landscape and the Role of the SEC
One of the main points of contention Garlinghouse addressed is the ongoing regulatory uncertainty. He criticized SEC Chairman Gary Gensler for perpetuating a conflict with the crypto industry. According to Garlinghouse, Gensler’s stance that almost all digital assets are securities has been repeatedly challenged and overruled in court. Despite these setbacks, the current administration continues its aggressive regulatory approach, which Garlinghouse argues is detrimental to the industry.
Interaction with the Current Administration
Garlinghouse mentioned his recent participation in a crypto roundtable in Washington, D.C., attended by key political figures, including Senator Gillibrand and Anita Dunn from the White House. He noted a shift in the Democratic Party’s stance, recognizing that they have fallen behind the Republican Party in supporting crypto innovation. This roundtable was an effort to bridge that gap and listen to industry concerns.
Ripple’s Legal Battle and the Impact of Court Rulings
Reflecting on Ripple’s legal battles, Garlinghouse highlighted a significant court ruling where the judge declared that XRP, Ripple’s digital asset, is not a security. This ruling, which he described as formative for the industry, came despite the SEC’s vigorous arguments to the contrary. The case underscored the need for clear and consistent regulatory guidelines, which Ripple continues to champion.
International Competition and US Regulatory Challenges
Garlinghouse expressed frustration that the US is lagging behind other countries like the UK, Japan, Singapore, and even the European Union, all of which have established clear frameworks for crypto regulation. He lamented that the US’s regulatory ambiguity is causing entrepreneurs and capital to move to more crypto-friendly jurisdictions. This migration is driven by the clarity and certainty provided by these countries, something the US has yet to achieve.
Legislative Efforts and Bipartisan Support
Despite the challenges, Garlinghouse pointed out that there is legislative momentum in the US, with both Democratic and Republican lawmakers working on crypto-related bills. He mentioned the recent passage of the FIT 21 Act in the House and ongoing discussions in the Senate. Garlinghouse is hopeful that with figures like JD Vance, who has proposed draft legislation, there will be progress in establishing a robust regulatory framework.
Concerns Beyond the White House
Garlinghouse acknowledged that the objections to crypto growth are not solely from the White House. He mentioned concerns raised by the Federal Reserve and the Treasury, agencies that operate with a degree of independence from the executive branch. According to the Ripple CEO, these concerns have also contributed to the complex regulatory environment that crypto companies must navigate.
Ripple’s Ongoing Relationship with the SEC
Toward the end of the interview, Garlinghouse was asked about Ripple’s current relationship with the SEC and the possibility of settlement talks. While he could not comment on specific discussions, he indicated that they are awaiting a final resolution on the issue of investment contracts sold to institutions. He remains optimistic about a positive outcome but noted that the timing of the judge’s ruling is unpredictable.
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