Is the United States Purging Crypto? 

Brad Garlinghouse is the CEO of the financial technology company Ripple Labs, and in an interview with the television network Bloomberg on March 2, commented that crypto and fintech have already begun moving offshore from America.

Notably, Garlinghouse believes the current tendency isn’t good for America, stating:

“I’ve said it before, and I’ll say it again- crypto moving offshore is not good for American innovation. Period, full stop.”

And this is no surprise since Ripple Labs has been served a lawsuit by the US. 

The United States Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs Inc. and its executives, including CEO Brad Garlinghouse and Chairman Chris Larsen, on December 22, 2020.

The SEC alleges that Ripple and its executives sold unregistered securities in the form of XRP, the cryptocurrency that Ripple created and operates. The SEC argues that XRP meets the definition of a security under the U.S. securities laws, and that Ripple should have registered the sales of XRP with the SEC.

Ripple has denied the SEC’s allegations and has argued that XRP is not a security, but rather a digital currency similar to Bitcoin and Ethereum, which the SEC has previously determined are not securities. Ripple has also criticized the SEC’s approach to the case, arguing that the agency has not provided clear guidance on how digital assets are regulated.

Garlinghouse felt confident that the lawsuit would be resolved favorably, noting: “Judges take however long the judges will take. We’re optimistic that this will certainly be resolved in 2023, and maybe [in] the first half. So we’ll see how it plays out from here. But I feel very good about where we are relative to the law and the facts.”

And the solution could be political, since the US Treasury is still experimenting with the idea of rolling out a Central Bank Digital Currency (CBDC)In fact, the Federal Reserve has been conducting research and experiments related to CBDCs since 2015.

In recent years, the potential benefits of a CBDC have become more apparent, including increased financial inclusion, faster and cheaper cross-border payments, and more efficient monetary policy implementation. However, there are also concerns regarding cybersecurity, privacy, and financial stability that must be addressed before any decision is made.

The US Treasury has stated that it is committed to studying the potential benefits and risks of a CBDC, but has not yet made a definitive decision on whether to pursue one. The Federal Reserve has indicated that it will release a discussion paper on CBDCs in the coming months to gather feedback from the public and stakeholders.

Can ”legacy” cryptocurrency co-exist with new CBDCs? Not if the powers-that-be consider them to be a threat to the power structure. This is why cryptos like XRP continue to come under attack. Looks like we’ll be using self-custody and VPNs for years to come.