Ripple published a new whitepaper explaining how the UK can take a lead in establishing crypto standards making it one of the attractive centers for the crypto industry, such as Dubai, Singapore, and the EU.
Amid their ongoing dispute with the US Securities and Exchange Commission (SEC), blockchain startup Ripple has reached out to British regulatory agencies asking them to take the lead in establishing a crypto regulatory framework. On Tuesday, November 15, Ripple issued a regulatory whitepaper suggesting some expected revisions to the UK Financial Markets and Services Bill. This bill shall determine the crypto regulatory framework for Britain.
The regulators in the UK introduced the bill for the first time in the British Parliament on July 20, 2022. In October, the lawmakers voted on introducing additional elements governing crypto regulation. Ripple’s recommendations center around establishing a “clear regulatory framework that distinguishes between different types of crypto asset activity,” depending on their respective risk profiles. The whitepaper from Ripple reads:
“The UK has long hosted one of the world’s leading financial centers. Now the U.K. has the opportunity to build on this foundation to make the most of the next wave of global financial innovation by developing its crypto asset sector”.
In the whitepaper, Ripple already adds that the UK’s upcoming legislation should “delineate clearly” between consumer-facing and other business-supporting propositions.
The Environmental Impact of Digital Assets
In its whitepaper, Ripple also speaks about how each blockchain network has a varying impact on the environment. This entirely depends on the way it mines tokens and validates transactions. For e.g. the Proof-of-Work (PoW) blockchain platforms such as Bitcoin require more computational power to add new blocks to the network.
On the other hand, the Proof-of-Stake (PoS) blockchain requires validators to stake the crypto in order to approve transactions. Such blockchain networks consume very little energy as compared to their PoW counterparts.
However, distributed ledger networks such as Ripple’s XRP work on a different kind of mechanism dubbed Proof-of-Consensus (PoC) which requires the network’s “unique nodes” to agree on which transactions can be processed in a network. The minimum consensus required in this case is 80%.
For a while Ripple has been arguing that XRP presents a more environment-friendly alternative to Bitcoin’s energy-intensive PoW consensus mechanism.
Ripple’s whitepaper also notes that the UK can draw inferences from other jurisdictions that have already established their regulatory frameworks. Ripple believes that this will help the UK become one of the attractive centers for the crypto industry, such as Dubai, Singapore, and the EU.
Further, to empower its crypto-asset industry, the UK should craft its “own bespoke regulatory framework”. Such a solid framework will provide support and certainty to crypto businesses as they grow. The whitepaper also highlights the “urgent need” of improving education in the crypto space.