Ripple’s chief market strategist has hinted of links to Washington.
A lot of Homework
In an interview published in Breaker, Cory Johnson suggested that the Ripple team has been in talks with the White House, which is concerned by the fact that China is mining the majority of the world’s Bitcoin and Ethereum.
“There’s clearly a lot of homework going on. The White House in particular seems to be thinking about what it means to have 80 percent of bitcoin mining taking place in China and a majority of Ether mining taking place in China,” he said.
Johnson declined to mention names, but said: “we’re in regular talks throughout Washington, and we meet with regulators as well as politicians.” Former US President Bill Clinton did speak at a Ripple event in October, but that was not in an official capacity.
XRP, the cryptocurrency associated with payment service provider Ripple, is the third-most valuable cryptocurrency on the market, with a total value of $18.2 billion, according to coinmarketcap.com. Unlike Bitcoin and Ethereum, it is not generated through mining. Johnson said that people in the Trump administration “seem to get” the ramifications of this in terms of environmental impact and foreign control.
The implication is that by focusing on XRP, foreign dominance of this sector can be weakened.
The American Way
However, it can be argued that with XRP, foreign control is replaced by private control.
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Ripple has been criticised for holding around 60 percent of XRP tokens, or very approximately $10.8 billion at the current price. Ripple has always claimed that XRP is a decentralised currency – Johnson explains that Ripple is to XRP as Chevron is to oil; it may have a dominant interest, but the actual commodity itself is fundamentally independent.
In response to the criticisms, Ripple has locked its holdings in an escrow account that it can’t touch. However, some have claimed that this itself is a tactic to raise the price of XRP. It may or may not be relevant to note here that certain members of the Ripple management team have become extremely wealthy.
In terms of the environment, Johnson is referring to the fact that cryptocurrency mining uses enormous amounts of electricity, the generation of which is harmful to the environment. It seems unlikely that this would be a great cause for concern for the current US administration, which pulled out of the Paris Climate Agreement in June 2017.
In July, the Trump administration set up a new financial fraud task force, replacing the older one that did not have cryptocurrency.
Regulation and Lawsuits
In order for XRP to become institutionalised in the US, it will first need to be regulated. At present, that country’s Securities and Exchange Commission has not yet decided if XRP is a security. There are currently a number of active class-action lawsuits running against Ripple on exactly this topic. Ripple categorically denies that XRP is a security.