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The strong swings in the price of XRP, now the third most important cryptocurrency in the world, have been largely driven by a factor in recent months: it is said that Coinbase, the largest bitcoin exchange in the United States, is starting to offer XRP.
While Coinbase has not yet done so, Brad Garlinghouse, CEO of Ripple, the company that created XRP, publicly supported for the first time Thursday that it should have.
Coincided in San Francisco, Coinbase currently offers the purchase and sale of Bitcoin, Ethereum, Bitcoin Cash and Litecoin, and will soon add Ethereum Classic, the company announced last week. But XRP, whose market capitalization of some $ 21 billion exceeds that of all other cryptocurrencies except Bitcoin and Ethereum, has been outdated, despite reports that Ripple, which owns more than half of the digital tokens of XRP, tried to pay Coinbase $ 1 million to list it.
Ripple sells its blockchain technology to financial institutions around the world – some of which also use XRP cryptography to accelerate and reduce international payment costs – and has long claimed that the value of XRP will increase as banks grow. .
"While we solve the large-scale problems for institutions, I think it is in Coinbase's interest to participate in this," Garlinghouse said in an interview with Fortune Jeff John Roberts at the CB Future & # 39; s Future of Fintech conference in New York.
The price of XRP has fluctuated this year from about 50 cents (where it was suspended at the time of publication) to almost $ 4 in January, following a barrage of rumors that Coinbase was close to adding the cryptocurrency.
Still, Coinbase canceled a renewed series of such speculations in March, and said that it will only exchange cryptocurrencies that were deemed by regulators not as securities, a designation that may require trade to obtain additional licenses and approvals.
This could be why Coinbase and other US exchanges have been reluctant to trade XRP. The announcement last week by the US Securities and Exchange Commission that Ethereum does not meet the definition of security, because of its decentralized structure, has also raised concerns about the fact that XRP can be classified as one, considered the majority of Ripple and a close relationship with the cryptocurrency. "Systems that rely on central actors whose efforts are key to the success of the business" would be subject to the enforcement of securities laws, "said SEC official William Hinman in the statement, although he did not explicitly mention XRP.
Garlinghouse, however, refuted the idea that XRP could fall under the jurisdiction of the SEC.
"I think it's really clear that XRP is not a security," he told the conference. For example, he explained, the XRP blockchain, or public ledger, "exists independently of Ripple" and would continue to function even if the company fails; in addition, XRP tokens have a technological purpose (facilitating monetary transactions) that traditional stocks such as stocks do not. XRP also does not authorize its owners to participate in Ripple, the company itself.
"I do not think our ownership of XRP gives us control," added Garlinghouse. "Saudi Arabia has a lot of oil, which does not give it control over oil".
Actually, said Garlinghouse, he has no control over Coinbase's plans. He refused to predict when XRP could be listed on one of the major US cryptocurrency exchanges, such as Circle, itBit, Square & # 39; s Cash or Robinhood. (At present, Kraken is the only large US stock exchange to offer $ and XRP trading, and not all states.) "I can not speak for what Coinbase decides or decides not to do," he said.
But exchanges seem to wait for regulators to clarify the status of XRP before deciding whether to authorize it on their platforms. Last week, the itBit trading company received the approval of the New York regulators to add to its exchange Stellar Lumens, a cryptocurrency created by a Ripple founder, but has not yet requested authorization for XRP .
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