Last Updated on November 17, 2022 by Bitfinsider
The company has released a new regulatory whitepaper in anticipation of planned modifications to the UK’s Financial Markets and Services Bill, which will outline the country’s crypto regulation framework.
This bill was initially proposed to the British Parliament on July 20, 2022, which then voted in early October to include further crypto regulatory provisions.
The crux of Ripple’s recommendations is on finalizing “a clear regulatory framework that differentiates between different types of crypto asset activity,” as dictated by their respective risk profiles, which, according to Ripple, might vary.
The crypto company claims that any future legislation should “clearly distinguish” between consumer-facing and business-supporting concepts.
According to the study, crypto firms should be treated differently based on their “degree of interconnectedness with the rest of the economy and, thus, the potential risk they pose more broadly.”
Comparing tokens based on proof-of-stake (PoS) and proof-of-work (PoW) blockchains, the company’s whitepaper also mentioned how each blockchain has a different environmental impact depending on how it mines tokens and validates transactions.
Ripple’s XRP token uses neither of the aforementioned approaches, but rather a Proof-of-Consensus (PoC) protocol in which a network of “unique nodes” reach an 80% consensus on which transactions can be processed in the network.
Ripple has long stated that XRP’s PoW consensus method is more eco-friendly than Bitcoin’s energy-intensive PoW consensus mechanism.
Ripple’s whitepaper also suggests that the UK adopt the regulatory frameworks of Singapore, Dubai, and the European Union, which Ripple believes will help countries become “attractive locations” for the crypto asset business.
Ripple said that the United Kingdom should create its “own unique regulatory framework” to empower its crypto asset business, using these other regimes as a model.
Such a structure will provide predictability and assistance to crypto firms as they expand, while simultaneously fostering public confidence.
In addition, the whitepaper stated that there was a “urgent need” to increase education in the crypto asset market “across all levels of society,” mocking the existing political discussion of crypto in the United Kingdom as a “punchline and political football.”
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