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95% of Ripple’s customers are not from the US, CEO Garglinghouse says

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As Ripple reportedly prepares to relocate its headquarters outside of the United States, it turns out that only 5% of the company’s clients are based in the country, according to the firm’s CEO.

On Dec. 2, Ripple CEO Brad Garlinghouse sat for an interview with CNN anchor Julia Chatterley to discuss Ripple’s regulatory hurdles in operating in the U.S.

According to Garlinghouse, as much as 95% of the San Francisco-based company’s customers are located abroad. He claimed that Ripple’s services are not as popular in the U.S. due to the ongoing regulatory uncertainty around its associate token XRP, Garlinghouse said:

“95% of our customers are non-U.S. customers, and only about 5% are here in the U.S. And people say ‘why you are a U.S. company’ and ‘why is that?’ One of the dynamics is that U.S. companies are waiting for the clarity, and that clarity emanates from the Securities and Exchange Commission.”

Garlinghouse noted that the SEC recognized other major cryptocurrencies like Bitcoin (BTC) and Ether (ETH) as non-securities years ago. However, XRP, the fourth-largest cryptocurrency by market capitalization, still does not have that clarity:

“For us, around XRP and over 100 companies that are working with XRP getting that clarity, it’s very clear to me that XRP is being used by many companies as a currency. You had the U.S. Department of Justice refer to XRP as a currency, you had FinCEN refer to XRP as a currency. But you haven’t yet had that clarity from the SEC.”

According to Garlinghouse, Ripple has had some issues with U.S. customers concerned about the regulatory status of Ripple’s XRP-related offerings.

“Oftentimes when I’m speaking to customers talking to them about our product that uses XRP in the payment flows, they will ask me about regulatory dynamics, and we have had customers saying ‘look until there’s clarity and regulatory frameworks we’re going to hold off,’” the CEO said, adding, “Now that has not been the case because of the clarity and the certainty” in other countries like the U.K.” 

Previous comments by Garlinghouse would suggest that Ripple is gunning for the SEC to treat XRP much the same as it has Bitcoin or Ether i.e. by not classifying it as as security. Last month, he said “it’s very hard to look at XRP as a security,” stating that he is “not aware of any market globally that thinks that XRP is a security.”



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.