Ripple said on Nov. 9 it is launching a new product for U.S. banks and fintech firms that lets their customers invest in and trade cryptocurrencies.
The new product, called Ripple Liquidity Hub, is designed as a plugin for financial institutions. “Enterprises will use Ripple Liquidity Hub to easily and seamlessly provide their end customers with the ability to buy, sell and hold digital assets at the best possible prices across a range of venues,” Ripple said in a press release. Financial institutions and fintechs will be able to offer customers the ability to trade bitcoin, ethereum, Litecoin, XRP, with more being added later.
“Customers are coming to banks asking, how can we buy bitcoin or digital assets, and this is a solution that enables banking customers to do that,” Ripple executive Asheesh Birla told Yahoo Finance.
Ripple is a blockchain-based digital network that started out as a payment settlement asset exchange similar to SWIFT, the global interbank payment network used by banks, brokers and central banks for transferring money internationally. (RippleNet’s transactions use cryptocurrencies instead of fiat currencies.)
San Francisco-based Ripple is expanding its product offerings as the global crypto market – now worth more than $3 trillion – is growing rapidly and gaining wider acceptance.
Ripple on regulations
Birla says clearer regulations would help the crypto industry grow, but that applying bank-like regulations as the administration has recommended for stablecoins (which some infer could extend to the rest of the crypto industry) will hurt innovation.
“I’m not advocating taking old regulation and peanut butter spreading it over cryptocurrency,” he said. “We are advocating for clear regs that are modernized for what blockchain and cryptocurrencies can do and so far it hasn’t been clear.”
The Biden administration last week recommended stablecoin issuers be regulated like banks, which would mean complying with capital and liquidity requirements. Acting Comptroller of the Currency Michael Hsu, in a subsequent speech last week, said crypto players should “level up,” suggesting that bank-like rules could apply to all of crypto, not just stablecoins. Hsu urged crypto firms to embrace this approach because it would help investors differentiate safe crypto from riskier crypto.
Birla says regulators shouldn’t take 1950s-era banking regulations and apply them to cryptocurrencies just like regulators didn’t take 1950s-era telecommunication regulations and apply them to the Internet. “They had to rework it and make it modern. They had to make sure that it safely fits,” he said. “We should take that same approach and apply that to crypto in the U.S. That’s not happening today and needs to happen with the next round of regulations.”
Birla says Washington needs to get more experts to weigh in to help shape regulation and that a new clear framework should be created for companies to operate under until the government can come up with new regulation. He says there are clear regulations internationally and because of clear regulation banks, corporates and fintechs are adopting crypto.
“If you’re starting a crypto company today, you’re probably thinking twice about having it in the U.S. because of that reason,” he said. “But it’s not too late. We can get things turned around.”