- Ripple would consider relocating its operating base from San Francisco to London due to an unfavourable US regulatory environment.
- Ripple founder Brad Garlinghouse says this is because the UK Financial Conduct Authority does not classify XRP as a security.
- Japan, Singapore, Switzerland and the United Arab Emirates are also reportedly under consideration.
Ripple’s founder, Brad Garlinghouse, revealed that the company is considering moving its headquarters from San Francisco to London.
Speaking to CNBC on October 23, he said the decision was due to the different regulatory environments in the two countries.
The U.S. Securities and Exchange Commission (SEC) has not taken a concrete position on whether it considers XRP to be a security or a currency. This is compounded by an ongoing legal battle between Ripple and several Crypto Legacy investors who argue that its sales of XRP are unregistered securities.
„The UK offers a clear taxonomy“.
Garlinghouse believes that the UK Financial Conduct Authority’s (FCA) position on the XRP is sufficiently clear and advantageous to justify a possible relocation to London.
The FCA currently classifies XRP as a currency rather than a security, which is particularly important given that the entire case for using Ripple for XRP would be compromised if it were classified as a security.
Explaining his preference for the UK regulatory environment at CNBC, Garlinghouse explained:
„What you see in the UK is a clear taxonomy, and the UK FCA has played a leading role in characterising how we should think about these different assets and their use cases. The result of this was the clarity that XRP is not a title and is used as currency. With this clarity, it would be advantageous for Ripple to operate in the UK. »
Speaking at L.A. Blockchain Summit on October 6, Ripple co-founder Chris Larsen alluded to Garlinghouse’s frustrations when he revealed that the company was considering moving to Singapore in an effort to break out of its U.S. regulatory quagmire.
According to Garlinghouse, other jurisdictions vying to become Ripple’s new global base of operations outside the UK and Singapore include the United Arab Emirates, Switzerland and Japan.
Ripple’s XRP Regulatory Issue
Ripple has made no secret of its objective to provide an alternative to the SWIFT network for international settlements using XRP on a high-speed Decentralised Ledger Technology (DLT) framework.
If XRP were to be classified as a security, this would place it under the regulatory responsibility of the SEC – and potentially wipe out the main use case for XRP.
While Ripple is already working with financial giants such as American Express and Santander, none of them are currently using its XRP settlement solution. Garlinghouse predicted in 2018 that by 2019, XRP would be a consumer product used by „dozens of banks“.
This has largely failed to happen despite some transfers with money transfer services, and Garlinghouse believes this is due to the regulatory snafu, which scares off potential customers. Speaking to CNBC, he said:
„Because of the lack of clarity about some of these regulations, we have customers who do not want to talk publicly about what they are doing“.