Democratic presidential nominee, Joe Biden, will defeat president Trump after collecting more electoral votes in Nevada and Pennsylvania. Biden is expected to leverage a former Obama regulator to oversee Wall Street operations. The former CFTC head started calling XRP an unregistered security back in 2018. What could this mean for XRP’s progression in the United States?
Biden Wins Presidency
According to various media outlets, Joe Biden has secured enough electoral votes to defeat President Trump in the 2020 election. Despite many legal concerns brewing over mail-in ballots, media outlets have moved forward, announcing the defeat after Biden secured wins in Nevada and Pennsylvania. Even though Trump has not accepted the defeat yet, Biden has already started putting together a transition team. According to Politico, Gary Gensler has joined the Biden transition team to advise on Wall Street. Over the last couple years, Gensler has been very vocal on digital asset markets.
Gary Gensler & Cryptocurrency
Despite the Biden administration not sharing any thoughts on the crypto industry, Gensler has been very vocal over the years. Even though the former Goldman Sachs executive and former CFTC head will be involved in Wall Street oversight, Biden may look for advice in the crypto space from him as well.
Back in 2019, Gensler did an op-ed on Coindesk, in which he labeled Bitcoin as a catalyst for change. He went on to say that:
“I remain intrigued by Satoshi’s innovation’s potential to spur change – either directly or indirectly as a catalyst. The potential to lower verification and networking costs is worth pursuing, particularly to lower economic rents and data privacy costs, and promote economic inclusion.”
Under President Obama, Gensler applied a tough stance on Wall Street, especially after the 2008 financial crisis. His “hard-head” approach has been heard in the crypto space as well. Despite Gensler seeing potential in Blockchain and Bitcoin, he still believes it needs to be highly regulated to scale. According to a report in 2019, the former CFTC chair believes that individuals should have both investor and consumer protection pertaining to Bitcoin. He has also supported the notion of extending national level regulation to support various facets of crypto markets.
Not So Bullish On XRP ?
Gensler has historically expressed interest in Bitcoin and Blockchain technology, but the same type of sentiment has not been there for altcoins. He has labeled XRP an unregistered security, and warned that many blockchain platforms would be in the same bucket in the near future. It is important to note that during this time, Gensler agreed that Bitcoin should not be considered a security. He said that unlike Bitcoin, XRP is not decentralized and is a noncompliant security Since Ripple holds XRP tokens and is working on developments that could make the token more valuable.
The SEC has stated that Bitcoin and Ethereum are not securities, but Ripple has been in court for over 2 years regarding XRP’s legal status. Over this time, Brad Garlinghouse, the Ripple CEO has argued that XRP is not a security. As of recent, Ripple has even discussed relocating to the UK. XRP is not considered a security in the UK, and Ripple believes regulations in the US are making it impossible to innovate. Ripple has a strong backing from investors, with a valuation of more than $10 billion. Due to uncertainties around its legal status, XRP is also underperforming large cap cryptocurrencies this year. Over the last year, XRP has returned -5.29%, while Bitcoin has grown +66%. Many investors fear an environment where XRP gets labeled a security and exchanges in the US are forced to drop Ripple’s native digital asset.
It is still way too early to see if Gary Gensler will have any influence on the crypto and blockchain sectors. If he does, it raises some red flags for XRP since Ripple is still going through litigation. It is uncertain as to how much influence Gensler could have over XRP’s legal status, but it seems like the CEO of Ripple is not too concerned.
Democracy wins – regardless of who you voted for, it’s incredible to see the historic voter turnout this election. Congrats to President-elect @JoeBiden and Vice President-elect @KamalaHarris – it's time to come together and turn to the many challenges that lie ahead
— Brad Garlinghouse (@bgarlinghouse) November 7, 2020
Garlinghouse has embraced the incoming Biden and Harris administration. With the talks of Ripple relocating to places like the UK, there is still opportunity for XRP to thrive, but it seems like global adoption in the US still has a gloomy outlook.
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