Ripple XRP/USD is holding firm at around $0.4570, having rebounded from its early low in the Asian markets at $0.4370. The XRP price retracement can be largely attributed to the recent encouragement surrounding Bitcoin, which has seen its price soar again into the $8,000 region. There have been further positive news surrounding XRP with a Weiss Ratings survey demonstrating that Ripple is recognized as the preferred cryptocurrency for transferring digital assets between cryptocurrency exchanges. More than three-quarters (78%) of respondents said that XRP is the most reliable and efficient means of moving crypto assets from one exchange to another.
That’s as far as the positivity goes for Ripple at present, as the debate rages on as to whether or not XRP is a security or a genuine cryptocurrency. Many crypto investors are still unsure whether to invest in Ripple or not due to its regulatory battle with the Securities and Exchange Commission (SEC). In the US, the XRP token connected to Ripple’s blockchain-powered payment platform, which recently partnered with Western Union, is embroiled in a debate over whether securities laws should be applied to XRP.
In terms of market capitalization, XRP is the third-largest cryptocurrency behind Bitcoin and Ethereum, neither of which are considered to be securities. However, XRP has caused a stir with the SEC because 60 million of the 100 billion XRP tokens created are still owned by the Ripple platform. Nevertheless, Cory Johnson, chief market strategist at Ripple, insisted to CNBC back in April that it XRP is “absolutely not a security”, adding that it doesn’t “meet the standards for what a security is based on the history of court law”.
Ripple CEO, Brad Garlinghouse also said recently that he felt it was “really clear that XRP is not a security”. Garlinghouse insisted that XRP’s public ledger “exists independent of Ripple” and therefore cannot be considered a security. Were Ripple to end its operations and decide to close its platform, it would not affect XRP in any way.
However, some crypto experts believe that XRP should be considered more of a “digital fiat” rather than an out-and-out cryptocurrency. Anatoly Castella, CEO of Elpis Investment, believes that XRP does not follow the “purest interpretation of a cryptocurrency”. That is certainly true and the fact that XRP is looking to revolutionize the global financial system by assisting developing countries that don’t yet have adequate infrastructure for digital financial transactions would suggest it may be more of a digital fiat in the years ahead.
The biggest concern for XRP is if the SEC does deem it to be a security, as this could have severe consequences to the price of XRP in all of the leading cryptocurrency exchanges, except for Coinbase. There is a fear that a negative decision against XRP could have a ripple effect throughout many other leading altcoins. Meanwhile, many affiliated Ripple entities would also be at risk of suffering. We have already seen lawsuits targeting Ripple entities claiming that XRP is a security, so it would not be anything new. However, the decision to label XRP a security would not bring into question the long-term future of Ripple’s xCurrent, the platform that gives financial institutions the ability to move fiat currencies across borders, so hope springs eternal that Ripple could cope with the decision either way.