Jump to content
Tradekraft

What if Ripple went the other way with XRP

Recommended Posts

What do you think the chances of something like Ripple encouraging the SEC to deem XRP as a security. That would be a shocking game changer.

https://www.newsbtc.com/2018/04/04/ripple-struggles-to-get-listed-on-u-s-exchanges-as-regulators-determine-what-coins-are-deemed-securities/

"Few things have propelled XRP’s price more in recent months than speculation that the token is set to graduate to U.S. exchanges — exchanges that face stricter regulations than those based in other parts of the world. A U.S. listing would cement XRP’s standing among the top cryptocurrencies: by market cap Ripple is the third-largest, behind Ethereum and Bitcoin

While the coin itself doesn’t represent an ownership stake in Ripple, a concern is that the close relationship might still lead regulators to deem XRP a security. If XRP is classified as a security, it would be removed from the largely unregulated world of cryptocurrencies and become subject to requirements similar to those that govern assets like stocks, as would exchanges that offer it. U.S. authorities are still clarifying which tokens deserve the designation as a security, so it’s not surprising that exchanges are wary". 

Share this post


Link to post
Share on other sites

I think that the risks outweigh the potential reward right now given that increasing liquidity is currently a major priority for Ripple's business plan around XRP's utility.  If the wall street money was all lined up and ready to dive in tomorrow, then yes as a first mover into digital asset securities they might get a huge advantage.  But I don't think the wall street money is really waiting on the sidelines just yet.  Most major FI have yet to offer any kind of mainstream product (think ETF) for their client portfolios to enter the digital asset sector.

Share this post


Link to post
Share on other sites
7 minutes ago, Zedy44 said:

I think that the risks outweigh the potential reward right now given that increasing liquidity is currently a major priority for Ripple's business plan around XRP's utility.  If the wall street money was all lined up and ready to dive in tomorrow, then yes as a first mover into digital asset securities they might get a huge advantage.  But I don't think the wall street money is really waiting on the sidelines just yet.  Most major FI have yet to offer any kind of mainstream product (think ETF) for their client portfolios to enter the digital asset sector.

Thanks. The thought occurred to me that it could be in Ripples best interest to bring the mountain to wall st instead of waiting for wall st to find the mountain. XRP being listed on the Nasdaq has a nice sound to it. 

Share this post


Link to post
Share on other sites

It is of interest to note, that NikB of Ripple has been forceful in his assertions that XRP is not a security... so clearly, there has been information shared internally to the company - to reinforce this perspective. 

My view is a bit different...

  • if a token is sold to the benefit of the organization that OWNs the token AND if, the companies' executives have made public statements to effect that XRP revenue has ensured that Ripple is cash flow positive... THEN, I would think that XRP is a security token.
  • regulation is a blunt force, so, if there is an SEC position on tokens as securities, then Ripple is unlikely to escape that regulation, with nuanced explanations.
  • further, there may be different types of XRP tokens... as the role of XRP has changed over the years. Purchasers of each flavour of token could be considered differently. Oh, this opens a can of worms... 'we' could trace the ownership of the various flavours of XRP tokens, to their current holders... I am thinking that these current holders would have different claims. I guess this would determine whether XRP was fungible... or NOT.

What is clear is that there is much uncertainty remaining.

--

One must wonder WHY Ripple people chose to incorporate Ripple as a for profit company and not a foundation. To me, it looks like the founders expect to BENEFIT MORE, if it was a corporation, as shares in the company could be sold independently from the XRP token, by the founders.

Much uncertainty ahead for the company managed by MBAs.

Share this post


Link to post
Share on other sites
4 minutes ago, Tradekraft said:

Thanks. The thought occurred to me that it could be in Ripples best interest to bring the mountain to wall st instead of waiting for wall st to find the mountain. XRP being listed on the Nasdaq has a nice sound to it. 

Yeah you posed an interesting question / idea.  I hope we get some more input from other users on it.  I feel that if XRP were listed like a NASDAQ security we might see it become essentially a USD Tether replacement.  Sounds awful on the surface, but who knows where the value would settle given XRP's utility usage and stable price point.  It would not be pegged like USDT so people moving in and out would pay a premium to use it depending on average volume.

Share this post


Link to post
Share on other sites

If XRP was listed as a security it would destroy the entire use case of itself.

People are aware that simply owning a lot of something doesn’t make it a security, right?

I can produce synthetic oil but that doesn’t make it a security....

the entire concept that XRP would be considered to be similar to an issuance of ownership and the rights granted therein is mind boggling....

 

WHAT???

Share this post


Link to post
Share on other sites
3 minutes ago, MaxEntropy said:

It is of interest to note, that NikB of Ripple has been forceful in his assertions that XRP is not a security... so clearly, there has been information shared internally to the company - to reinforce this perspective. 

My view is a bit different...

  • if a token is sold to the benefit of the organization that OWNs the token AND if, the companies' executives have made public statements to effect that XRP revenue has ensured that Ripple is cash flow positive... THEN, I would think that XRP is a security token.
  • regulation is a blunt force, so, if there is an SEC position on tokens as securities, then Ripple is unlikely to escape that regulation, with nuanced explanations.
  • further, there may be different types of XRP tokens... as the role of XRP has changed over the years. Purchasers of each flavour of token could be considered differently. Oh, this opens a can of worms... 'we' could trace the ownership of the various flavours of XRP tokens, to their current holders... I am thinking that these current holders would have different claims. I guess this would determine whether XRP was fungible... or NOT.

What is clear is that there is much uncertainty remaining.

--

One must wonder WHY Ripple people chose to incorporate Ripple as a for profit company and not a foundation. To me, it looks like the founders expect to BENEFIT MORE, if it was a corporation, as shares in the company could be sold independently from the XRP token, by the founders.

Much uncertainty ahead for the company managed by MBAs.

According to Brad Ripple is a software company leveraging blockchain technology and a native digital asset to provide solutions to their customers.  In that regard they are for-profit.  Could they make that work as a foundation / non-profit?  Probably, but they decided to move forward as a traditional software company.  There are advantages and disadvantages I'm sure.

I think they would have to tread very carefully if they moved towards aligning XRP as a security given the amount of XRP that's been distributed globally.  I assume Ripple has a plan for such a scenario already.  Maybe not a great one, but a plan nonetheless.  Most other digital assets will crumble to other regulatory hurdles before Ripple will face any such fate.  If it comes to XRP being designated as a security in the future you can bet such a decision is likely a political one by that point.

Share this post


Link to post
Share on other sites
13 minutes ago, Rose said:

And if xrp goes listed on NASD  or say CME, people can purchase/trade  directly on CME , no need for Coinbase. Similiar to Spotify went IPO without an investment firm. 

But you would still need liquidity globally.

Share this post


Link to post
Share on other sites
18 minutes ago, MaxEntropy said:

It is of interest to note, that NikB of Ripple has been forceful in his assertions that XRP is not a security... so clearly, there has been information shared internally to the company - to reinforce this perspective. 

My view is a bit different...

  • if a token is sold to the benefit of the organization that OWNs the token AND if, the companies' executives have made public statements to effect that XRP revenue has ensured that Ripple is cash flow positive... THEN, I would think that XRP is a security token.
  • regulation is a blunt force, so, if there is an SEC position on tokens as securities, then Ripple is unlikely to escape that regulation, with nuanced explanations.
  • further, there may be different types of XRP tokens... as the role of XRP has changed over the years. Purchasers of each flavour of token could be considered differently. Oh, this opens a can of worms... 'we' could trace the ownership of the various flavours of XRP tokens, to their current holders... I am thinking that these current holders would have different claims. I guess this would determine whether XRP was fungible... or NOT.

What is clear is that there is much uncertainty remaining.

--

One must wonder WHY Ripple people chose to incorporate Ripple as a for profit company and not a foundation. To me, it looks like the founders expect to BENEFIT MORE, if it was a corporation, as shares in the company could be sold independently from the XRP token, by the founders.

Much uncertainty ahead for the company managed by MBAs.

Sorry, xrp as a security is preposterous. No more so than a barrel of oil should be a security for Exxon. Xrp is an asset. It was never sold by Ripple to the public, ever. Never an ICO. All over the counter, post Ripple, sales. Ripple is unique in that respect. And as to Ripple being a foundation we are lucky it isn’t. (Other than being envious). I am glad that IN N OUT Burger is for profit as it keeps all our interests aligned. Mmm baby. Same with Ripple. ....As to shares of Ripple being sold differently than xrp. So what? The main asset is xrp. By a long long shot. Doesn’t matter if a Corp owns it or not. Same value. No more advantage if a Corp owns the shares or if founders own the xrp. 

Share this post


Link to post
Share on other sites

I don't see how they could identify it as a security. Not in the traditional sense.

But keep in mind we are breaking into new pastures with crypto, so can't rule anything out at this moment. Change comes for everything,  even regulation. 

Share this post


Link to post
Share on other sites
1 hour ago, Hodlezerper said:

If XRP was listed as a security it would destroy the entire use case of itself.

People are aware that simply owning a lot of something doesn’t make it a security, right?

I can produce synthetic oil but that doesn’t make it a security....

the entire concept that XRP would be considered to be similar to an issuance of ownership and the rights granted therein is mind boggling....

 

WHAT???

Thanks @Hodlezerper for your post. As an investor based on the potential of the company and not because I'm in the industry, I find your straightforward responses clarifying and reassuring. Thanks again!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...