December 5, 2022

Cardano Founder Calls For XRP Regulation As Commodity

With the major crypto lawsuit involving Ripple and the SEC coming to an end, crypto proponents are growing uneasy about the results. If the SEC wins the case, it can be detrimental to not just Ripple, but countless other blockchain networks and cryptocurrencies as well. One person to clarify their opinion on the matter is Cardano founder Charles Hoskinson.

After making statements on the matter earlier this year, he was ‘hit hard’ by XRP proponents. Consequently, he stated that he wants to clarify his stance on the issue between Ripple and the Securities agency.

XRP Is Commodity, Says Hoskinson

He clarified that he doesn’t agree with the SEC’s claim that crypto tokens are securities. Rather, he’s of the opinion that tokens should be treated as commodities. Hoskinson explained that according to him, most layer 1 protocols, which include the Ripple token, aren’t securities. That’s because they provide holders with a certain utility and decentralization.

Moreover, XRP passes the Howie test, which helps determine if an asset is a security. To summarize, he equates XRP tokens to commodities, such as baseball cards. He elaborates that just because people speculate on things like baseball cards, it doesn’t make it a security. So then, why not subject XRP to the same rules. Then, he warns that securitizing something like baseball cards can lead to obvious problems.

Crypto Market in Need Of Commodity Regulations

The Cardano founder did admit that appropriate oversight and regulation are crucial for the crypto industry if it is to remain stable. Similarly, scammers need to be kept in line and users should be subject to proper rules. He elaborated that to do all this, regulation suited to commodities would prove effective for cryptocurrencies.

Ripple Ecosystem Will Outlive its Creators

Another reason why Hoskinson argues that XRP is a commodity is its impeccable lifespan. In his Twitter statement, he explained that commodities outlive the people who create them. Here, he implies that the minds behind Ripple have developed an Ecosystem that will outlast the CEO and CTO.

He believes that the criticism from XRP fans only proves his point. In the future, the XRP ledger will offer users increased value. This doesn’t come as a surprise, considering how Ripple is collaborating with numerous companies to deliver new financial options.

Over the last few years, Ripple has signed numerous contracts with notable companies such as SWIFT. This is due to their faster blockchain and seamless transactions.

In his Twitter thread that talked about the Ripple-SEC lawsuit, he explained that it is absurd how the Securities authority is applying oversight meant for securities, to XRP. It’s important to remember that Ripple’s native token XRP has millions of holders, all of which are based across a hundred countries. Hence, these tokens can’t be controlled by just one single country’s fiduciary laws.