Ripple’s cryptocurrency, XRP, seems to be attracting quite a gathering after what was rumored as its listing on Coinbase sent investors on a trading spree. In just a few months since the alleged rumors, XRP’s value has jumped from just 50 cents to about $4. As at this moment, XRP is the 3rd most sought-after cryptocurrency in the world.
Coinbase is yet to add XRP to its list of tradable digital assets on its platform. Based in San Francisco, Coinbase is the largest Bitcoin exchange in the US, and offers trading services for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. It’s also planning to add Ethereum Classic soon.
While Coinbase has yet to do so, Brad Garlinghouse, CEO of Ripple, the company that created XRP, argued publicly for the first time Thursday that it should, refuting claims that the token might fall under SEC’s authority that regulates securities.
Brad faulted the idea that XRP is a security, saying that despite Ripple’s ownership of XRP, the company has no control over the token since its ledger system exists independently and would still continue propagating even if the company (Ripple) ceased its operations, suggesting that the cryptocurrency is decentralized just as Bitcoin and others. Garlinghouse said,
“As we solve problems at scale for institutions, I think it’s in Coinbase’s interest to participate in that,”
However, he said that since XRP’s objective was to facilitate easier transaction for institutions, it would be in Coinbase’s interest to contribute towards that objective. He likened the situation with countries like Saudi Arabia that have oil but are not in a position to control it. Brad was speaking in an interview with Jeff John Roberts of Fortune at the Future of Fintech conference hosted by CB Insight in New York.
But XRP, whose roughly $21 billion market capitalization exceeds that of all other cryptocurrencies except Bitcoin and Ethereum, has been passed over, despite reports that Ripple, which owns more than half of XRP’s digital tokens, tried to pay Coinbase $1 million to list it.
Garlinghouse, however, refuted the idea that XRP might fall under the SEC’s jurisdiction.
“I think it’s really clear that XRP is not a security,” he said at the conference. For one, he explained, XRP’s blockchain, or public ledger, “exists independent of Ripple,” and would keep functioning even if the company failed.
What’s more, XRP tokens serve a technological purpose (facilitating monetary transactions) that traditional securities like stocks do not. XRP also does not entitle its holders to a stake in Ripple the company itself.
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