In this episode of The Metaverse Podcast, we talk to Susan Friedman, Ripple’s Head of Policy, and Andrew Whitworth, EMEA Policy Director join to discuss the mission to build breakthrough crypto solutions for a world without economic borders.
Read our notes to learn more.
Susan Friedman Introduction
Head of policy at Ripple.
Works on global policy issues, focus on the U.S.
Actively look to Foster Global Frameworks that work together so that at a macro level crypto is able to thrive so that we are not creating walled Gardens and specific jurisdictions.
Global policy regulatory environment Overview
There's been a lot of positive momentum.
EU just passed MiCA (markets in crypto-assets) which will go into effect in 2024.
Brazil just passed a crypto regulatory framework for its jurisdiction.
There are several legislative proposals within the U.S.
Momentum towards building frameworks, creating clarity, giving industry the guideposts that it needs to be able to build in a responsible way while also protecting consumers is the momentum we are looking for.
Regulatory Harmonization Across Jurisdctions
Susan:
I think we're slowly moving in that direction.
I do think that the gaps in regulatory frameworks is what allowed ultimately something like FTX to happen it's that regulatory Arbitrage that takes place.
We do think that there is a need for the harmonization to be implemented more consistently across more jurisdictions that you do not have companies seeking to take advantage of the gaps.
U.S really has not moved as quickly as we think it needs to in the space and we're hopeful that 2023 will be a breakthrough year.
I do think the trend is slowly moving in the right direction.
What is your perspective on crypto being a politicized issue?
Susan:
I think when you look at it from a U.S. perspective what's been really encouraging is the level of the dialogue between two years ago and now when the 117th Congress started there's just a much more sophisticated level of the industry.
We are seeing bipartisan support for every major crypto bill that was been introduced for the past 2 years.
There’s a lot of work to do, it becomes difficult when you have an incident like FTX to make clear that crypto is not just speculation.
SEC and impact of Social Media on Regulation
Susan:
Twitter certainly has it audience.
There’s a lot of news happening on Twitter that helps the industry to be informed.
Motion for a summary of judgment were all filed with the SEC and Ripples.
We’re hopeful for a decision from the judge in the 1st half of 2023.
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We had multiple companies and groups file in support of our case 14 different amicus briefs or Friend of the Court briefs were filed.
I think the fact that we did have such a strong show of support demonstrates that the industry recognizes how significant the case is and that there is a chance for a significant decision to Define how you draw those lines in the U.S. between commodity and security.
We’re optimistic about a good outcome in the SEC litigation.
We have leaders from multiple parties and committees of jurisdiction calling for legislation and putting forth good-faith efforts to try and reach the right outcome.
What do you hope the outcome of this process will be for founders and the industry?
Susan:
The ultimate outcome is any decision in the case or legislation by Congress that allows Founders in the United States to understand how to draw a line between a token that is a security and a commodity.
The total lack of clarity and the fear that you will be brought in to face an enforcement action will keep the US from becoming a hub for crypto innovation in the way that the UK aspires to be.
Thoughts on MiCa (markets in crypto-assets)?
Andrew:
We think MiCA is definitely a step in the right direction.
I think it's a macro globally for how jurisdictions can think about creating comprehensive crypto asset Frameworks.
The fact that MiCA exists is good. The fact they did it frankly relatively quickly both for the EU and other jurisdictions is good and impressive.
European policymakers as actual policymakers in most jurisdictions I would say have been quite open to speaking to Industry to at least learn Industry's perspectives, and understand how certain requirements might impact the industry.
Why Ripple Chose UK
Andrew:
Ripple chose to make London or a London office a regional Hub a couple of years ago, we have around 70 people based here now that number keeps growing.
We see a lot of opportunities in London.
It's not just for the domestic Market but it's London as an International Financial Center.
Talking about the EU just now you need to have a stable certain policy framework for businesses to be kept comfortable innovating entering and growing.
From the industry point of view the UK needs to do to create the policy environment that will allow business to thrive.
The good outcome in the UK is that the crypto sector will be considered, treated and have the same sort of regulatory engagement as the traditional financial sector does.
If the UK seizes up which the opportunity it has kind of right now to frankly catch up with where some of the rest of the world has got to.
What Companies Look For When Choosing Locations
Andrew:
What other businesses need including Ripple is regulatory certainty.
Think an overarching crypto asset framework in law is what's needed the individual requirements and rules can and should be and will.
The bank of England's mandate is very clear in its financial stability and the safety and soundness of traditional Banks. The FCA is a consumer protection
A stable crypto asset framework will be good for businesses to provide the certainty it should be risk-sensitive to provide protection to consumers and financial stability.
Susan:
I would just add in there quickly that the advantage to that the UK has at this point is that it is not the first mover they have Frameworks that they can look at for best practices.
You have the right inputs to get to a great outcome with respect to regulatory clarity.
Jamie:
The UK has the advantage of being able to see the competitive landscape and see its weaknesses.
Thoughts on changes in the financial markets result in a pension fund being more active
Andrew:
I don’t have any insights at all.
Everyone looks at the cost of regulation.
I don't have anything specific to say to your question but as regulation in this space develops and as firms more and more get licensed in this base and their activities come within the regulation perimeter then you would expect them to be treated just like any other potential instrument.
FTX Impact on Crypto
Andrew:
I actually think that the crypto winter earlier this year is the more salient thing.
FTX is bad, and bad for the reputation of everyone but I think that reset has been maintained.
Susan:
What FTX has done is really highlighted the need to have regulatory Frameworks under which centralized exchanges like FTX have to register and be subject to oversight so that actors cannot take advantage of the gaps.
FTX has made it more difficult in the short run.
I'm optimistic about some good outcomes and some good policy outcomes in 2023.
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TODAY’S EDITION IS BROUGHT TO YOU BY TREZOR HARDWARE WALLET
Navigating the waters of crypto is risky; even the biggest CEXs & stable coins can have huge risks…
Act now, click the link below & become your own bank via self-custody.