One of Ripple’s senior executives confirmed that the biggest threat to Ripple’s business model is regulation.
Ripple’s senior vice president of product, Asheesh Birla, revealed the company’s fear of regulation during a speech at the University of Pennsylvania’s Wharton School of Business.
“We are going around the world making sure that for the next 1,000 customers that we want to bring on… which we think we can do in the next two years … that regulation is not going to be an issue,” Asheesh said.
To combat the potential harms of regulation, the company has built a team comprised of experts to ensure that the company’s clients and products are not affected by regulatory measures taken by governments across the globe.
A big question plaguing XRP, the cryptocurrency associated with Ripple, is whether or not the US Securities and Exchange Commission will rule it a security. Bitcoin and Ethereum have already been ruled as not being securities, but there has been no word on XRP yet. The company ardently denies that the currency is a security and has been taking measures to emphasize this.
Ripple’s CEO, Brad Garlinghouse, recently spoke on the matter, saying:
“I think it’s really clear that XRP is not a security. XRP exists independent of Ripple and it would operate even if Ripple Labs failed. I don’t think that our ownership of XRP gives us control. Saudi Arabia owns a lot of oil, but that doesn’t give them control of oil.”
XRP proponents are quick to emphasize that XRP existed before Ripple Labs was created, and that the XRP currency and ledger operate independently of the company. A key to the argument claiming that XRP is decentralized is the fact that its ledger is run and operated by independent nodes located throughout the world. XRP critics claim that this is irrelevant, and that the success of the currency is solely based on the success of Ripple Labs, making it a centralized security.
If XRP is ruled a security, exchanges that operate in the US will be forced to delist the currency, almost instantly drying up XRP’s liquidity. It is unclear whether or not owning the currency would result in ownership in Ripple Labs or if it would eventually be listed on securities exchanges.
During the event, Asheesh also spoke about other issues the company has faced, including varying regulatory measures between different countries and trouble recruiting talent due to limited financial resources.