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Washington, D.C., November 8, 2023 – Ripple CEO Brad Garlinghouse spoke at the DC Fintech Week conference on Wednesday, shedding light on the persistent hesitancy of some U.S.-based banks to embrace cryptocurrency, despite the company’s legal victory against the Securities and Exchange Commission (SEC) earlier this year. The ongoing concerns stem from the regulatory stance of the SEC and broader sentiments within the industry, hindering the full integration of crypto into the U.S. banking sector.
Ongoing Regulatory Challenges
While Ripple achieved a notable legal triumph over the SEC in July, followed by the dismissal of charges against two high-ranking company executives in October, the cryptocurrency sector continues to grapple with regulatory hurdles. These legal victories may have provided Ripple with some relief, but Garlinghouse made it clear that the company’s regulatory issues remain far from over.
Banking Sector Reluctance
Garlinghouse emphasized that U.S.-based banks remain cautious about embracing cryptocurrency, despite Ripple’s success in court. He explained that the hesitation is partly due to the perception that the U.S. government and regulatory bodies, including the Options Clearing Corporation (OCC), maintain an unfriendly stance toward the crypto market. He stated
“They’re like, ‘Look, even though you won the case, the United States government is still hostile towards crypto, the OCC is hostile towards crypto.’ And until that changes, the banks in the United States are not going to engage meaningfully,”
Garlinghouse pointed out the disparity between the U.S. and other countries in terms of crypto regulatory policies. While the U.S. has exhibited caution, other nations have adopted more welcoming approaches, which have fueled investments in the crypto sector. He expressed concern that the U.S. may be missing out on an opportunity to maintain its leadership position in the cryptocurrency industry.
“I don’t think the window has passed for the U.S. to be a leader,” he said, “but I think every day that goes by, these other markets, they want the entrepreneurs there, they want growth.”
Ripple’s Expansion Strategy
Despite the uncertainties surrounding U.S. crypto regulations, a majority of Ripple’s workforce remains based in the country. Garlinghouse believes that within the next decade, the U.S. will establish a constructive regulatory framework for cryptocurrencies. Until that happens, Ripple is planning to continue its global expansion efforts. He reiterated that 80% of the company’s new hires this year will be outside of the United States.
“Why would I want to hire more and more people in the United States?” Garlinghouse posed, underlining the importance of a supportive regulatory environment for fostering innovation and growth within the cryptocurrency sector. Ripple remains committed to navigating the evolving landscape of crypto regulations as it pursues global growth.
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