Fintech Security

Ripple Trying to Secure Licence in Ireland

Byline: Hannah Parker

Ripple seeks to attain a virtual asset service provider (VASP) licence from Ireland’s central bank to strengthen its presence in the European Union. Ripple plans to expand its business outside of the United States to increase its profits as it no longer obtains most of its income from America. If Ripple gets awarded the VASP licence, it can quickly open its market throughout the European Union. Reports also state that Ripple is trying to apply for an electronic money licence.

In a recent interview with experts at Bitcode Method Ripple General Counsel Stuart Alderoty announced that the company is effectively operating outside of the US due to the fallout from its legal battle with the Securities and Exchange Commission. Alderoty added, “Our customers and revenue are primarily generated outside of the United States, even though we still have a lot of agents inside the country.” Ripple has already dunked its toes in the market as it currently has two employees in the Republic of Ireland. It seeks to secure a VASP from the country’s central bank to provide its services throughout the European Union. The entity also plans to apply for an electronic money licence in Ireland soon.

Ripple’s commitment to invest in Europe comes despite an extended crypto winter where numerous firms prefer to cut costs and not expand their operations. Most exchanges like Coinbase, CryptoCom, Bybit, Huobi, and more have dismissed some of their employees. FTX’s failure to honour customers’ withdrawal requests and then file for bankruptcy did not help; it intensified the winter season. Previously the Irish central bank granted a VASP licence to the Gemini crypto exchange. During the approval in July for Gemini to offer digital asset services to local consumers, the firm’s Head of Ireland and Europe, Gillian Lynch, said, “Dublin is Gemini’s European headquarters, and we are seeing huge interest in crypto here. This registration helps customers have confidence in Gemini as a secure and transparent provider.”

Ripple’s history in the crypto market

Ripple has over 750 employees in offices across the globe, with half based in the United States. The firm uses blockchain technology to help financial institutions move money worldwide. In 2020, the US Securities and Exchange Commission (SEC) filed for litigation against Ripple, alleging that the Firm and its executives illegally sold XRP to investors without first registering it as a security. Ripple has disputed the claim that its token is an investment contract, saying it is used in its business to advance cross-border transactions between banks and other financial institutions. The ruling on the case is expected to arrive in the first half of 2023.

Ripple has expanded its payment method above financial institutions to include trade, technology, agriculture, e-commerce, and the supply chain. In 2008 Ripple introduced the On-Demand Liquidity (ODL) solution to overcome cross-border payments. The firm partnered with MFS Africa, one of the leading fintech firms with the most significant mobile money footprint in Africa. Ripple aims to enhance digital payment rails across the continent and to create a notion to build a breakthrough crypto solution for a world without economic borders. 

Expanding Ripple in the European Union

The CEO of Ripple, Brad Garlinghouse, believes that transparency builds trust and that crypto assets need to be regulated. The Markets in Crypto Assets (MiCA) framework that the EU wants to launch will help combat crypto fundraising schemes and assist EU nations in sustaining their top position in cryptocurrency payments. Alderoty disclosed: “I think MiCA will become a good start for expanding Ripple in European nations.” MiCA was formed as a legal framework for crypto asset providers and to protect consumers from risks related to crypto. During the interview, Garlinghouse agreed with Alderoty’s statement and noted, “Cryptocurrencies have never been all sunshine and roses, and as an industry, they need to mature.”

The process of getting a licence in Ireland

Ireland has no separate jurisdiction in regulating cryptocurrencies but has procedures that must be followed to get the licence. The Irish central bank provides services related to virtual assets. It involves a different type of virtual asset trade, digital asset exchanges for fiat currency, transfer of digital assets and providing wallet services. Ripple has taken steps to improve operations and increase agility by lowering the cost to provide better service for the providers with regular updates while maintaining transparency. Ripple has taken those steps on its platform to gain an advantage in securing the licence in Ireland.

On 14 November 2022, Ripple announced that it had released a set of guidelines outlining how Britain should regulate crypto. According to Ripple, the guidelines are intended to help the country create a framework for regulating digital assets. The bill must undergo procedures before it can be passed into law. Ripple executives believe that the entity is transparent, and it is highly unlikely that they would experience similar issues as FTX. We wish Ripple the best and hope it is successful in acquiring the licence in Ireland while we wait for a positive outcome regarding the lawsuit. We promise to inform you of any new developments concerning Ripple’s attempt to secure a licence and expand operations in Ireland. 

Photo by: Kanchanara on Unsplash

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