Ripple Calls for SEC to Adopt Network Maturity Standard

Ripple’s proposal could transform cryptocurrency regulation, impacting asset classifications like XRP and other altcoins. This initiative highlights Ripple’s continued push for clearer legal guidelines.

Proposal for Network Maturity Standard

Ripple Labs is advocating for the U.S. SEC to replace the nebulous “sufficient decentralization” standard with a network maturity standard . This request, documented in a formal communication to the SEC, aims to address inaccuracies related to asset classification as securities. Central figures include CEO Brad Garlinghouse and CTO David Schwartz, who emphasize the importance of user outcomes over strict decentralization.

“User outcomes are more important than strict decentralization purity.” – David Schwartz, CTO, Ripple Labs

Impact and Historical Context

The ongoing debate significantly affects the classification of numerous crypto tokens, particularly XRP. Previously, Bitcoin and Ethereum were excluded from being classified as securities, while XRP was affected by the SEC’s broader scrutiny. Ripple’s push for a refined system hopes to modify this existing regulatory landscape.

If adopted, the proposed change could alter the regulatory status of several tokens and alleviate issues stemming from the current ambiguity. Hester Peirce, an SEC Commissioner, stresses the importance of regulatory clarity, aligning with Ripple’s call for legislative rather than administrative actions, which could affect financial and business domains associated with crypto assets.

Ripple’s effort may set a precedent impacting how cryptocurrencies operate under U.S. jurisdiction. Historical precedents show federal influence in shaping crypto asset classifications, and new guidelines may widen or restrict market participation. This discussion underscores the need for consistent frameworks supported by congressional authority, potentially changing technological and regulatory landscapes.