Ripple supports Washington, DC based Coin Center. Image: Shutterstock
Innovation in banking often results from the convergence of three key domains: financial services, technology, and regulations. The regulatory framework is a crucial aspect of innovation. When crafted in a balanced, proactive way, regulations can directly drive positive innovation and market competition.
This is why Ripple has been an active participant in key policy discussions, advocating for policy that supports innovation and participating in industry initiatives such as our role on the Steering Committee of the Federal Reserve’s Faster Payments Task Force.
Regulatory frameworks help ensure the safety and security of financial products and the technologies that enable them. They create certainty, instill customer trust and enable broader adoption. For this reason, it’s vital that the frameworks developed to govern new technologies, such as virtual currencies, be done so in a way that mitigates risk and protects customers, yet are balanced to allow further advances to occur.
Our work for balanced, effective regulatory frameworks is not a solo mission – which is why this year Ripple is supporting Coin Center, the leading policy advocacy group focused on cryptocurrencies and blockchain technology. Through their expertise and thoughtfulness, Coin Center has been effective at driving a positive regulatory climate needed for further blockchain innovations.
Most recently, Coin Center was instrumental in assembling the new Congressional Blockchain Caucus, formed to build awareness among policy makers. Ripple is pleased to join their work and formally support Coin Center.
Jerry Brito, Coin Center’s Executive Director commented, “Preserving the freedom to innovate with cryptocurrency and blockchain technology is something that benefits us all, so it’s also great to see that the effort to do that has a broad and growing base of support.”
As our co-founder Chris Larsen has stated, we at Ripple believe it’s a very important time in history for this industry. Much like when the internet was formed in the early 90s, there’s a huge opportunity to support the creation of an Internet of Value: a system that moves money as seamlessly as information.
We’re heartened to see several market developments that show a thorough, thoughtful approach to regulation, allowing innovation to flourish while mitigating risks.
Last month, the Governor of the Bank of England and Chair of the Financial Stability Board, Mark Carney, spoke about the enormous potential of fintech, stating:
“Consumers will get more choice, better-targeted services and keener pricing. Small and medium sized businesses will get access to new credit. Banks will become more productive, with lower transaction costs, greater capital efficiency and stronger operational resilience.”
Yet, Carney points out, we cannot ignore the risks. While fintech may be new, the types of risk it may pose are not. We have well-founded principle-based frameworks for mitigating risk in financial services. These offer a great lens for looking at fintech. We’re not starting from scratch. And most recently, Philadelphia Federal Reserve Bank President and CEO Patrick Harker has stated that proper fintech regulations not only protect the consumers, but also the innovators by providing certainty and ensuring safety and soundness as companies grow.
Balanced regulatory frameworks enable the promise of new technology to be fully realized while ensuring robust security and customer protections. We look forward to many positive developments in 2017.
For more information, please visit our Policy Framework page.