Ripple's Ryan Zagone Discusses Regulation and The Future of InnovationMay 4, 2018, 11:13AM
Ryan Zagone, Ripple's Director of Regulatory Relations, has published a blog post that provides a sobering look at the future of regulation.
Ryan Zagone, Director of Regulatory Relations at Ripple, posted a blog post on May 2nd outlining the company’s position on regulation. Considering Ripple is often considered the “cryptocurrency for central banks,” Zagone’s commentary offers an interesting insight into how Blockchain technology could play into the future of our global financial ecosystem.
Zagone draws attention to the changing attitude of regulatory bodies as they begin “taking a close and thoughtful look at [Blockchain] technology.” In Zagone’s view, the discussions about crypto have been polarized until now, with the common sentiment among regulators being “Blockchain is good” and “digital assets are bad,” but with further examination, he says, the narrative is changing.
Zagone believes Ripple offers a unique application of Blockchain technology that satisfies regulatory requirements, while still providing a practical and useful application for Blockchain technology.
“Consider a hammer. You can use it to build a house, but you can also use it as a weapon, a use case for which we have laws and punishments. A hammer is only deemed good or bad by its application.”
The concern for regulators lies with the potential harm unregulated digital assets can cause. Cybersecurity, a lack of investor and consumer protection, and money laundering can all cause serious damage to an otherwise healthy economy, and the fundamental mitigation of these risks is essential to an effective financial system. Zagone states that these risks can be mitigated through three essential policy recommendations:
- Avoid applying a “one size fits all” approach to digital asset regulation, which stifles innovation from compliant projects.
- Build licensing frameworks that ensure consumer protection, anti-money laundering considerations and measures to protect from undue risk.
- Provide guidance for financial institutions to help them adopt new use cases for digital assets and promote inclusion of the technology in a regulated environment.
While many perceive Zagone’s latest blog post as a biased overview of how digital assets can fit into the future of finance, he is not alone in his belief that Ripple’s approach of supplementing our current monetary system rather than replacing it is the correct one. Zagone references IMF leader, Christine Lagarde’s recent statement saying that global financial systems can “harness the potential of crypto-assets while ensuring that they never become a haven for illegal activity” to create a “financial ecosystem that is more efficient and potentially more robust in resisting threats.”
Ripple's pro-regulation position should come as no surprise. Ripple executives have long advocated working with regulators to adapt our current financial framework rather than let crypto redefine our monetary system. Furthermore, concerned regulators facing the uncontrollable growth of Cryptocurrencies may look to companies like Ripple and similar projects as a safe compromise between the new technology and the established system. Ripple may provide an easily manageable way to begin benefiting from digital asset technology on a global scale.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.