Blockchain Hearing in UK Parliament Question Ripple

A blockchain hearing yesterday, saw UK Parliament question Ripple, who came under scrutiny and criticism by Martin Walker, Director of Centre for Evidence Based Management and a former developer at blockchain consortium R3.

Ryan Zagone, Ripple’s Director of Regulatory Relations, Dr. Grammateia Kotsialou of King’s College London and Chris Taylor, Chief Operating Officer at Everledger appeared before the British Parliament’s Treasury Select Committee.

The hearing took a negative turn, as Walker began scrutinising blockchain and dismissing Ripple’s technology, as a model that offers little more than the existing SWIFT messaging system, saying:

“simply having a blockchain doesn’t actually get people to update the status of where the payment is”

Throughout the hearing, Walker described blockchain as ‘a fad’, insisting that it offers “little to no” saving.  Members of parliament (MPs) pushed on the cost saving benefits of blockchain technology, with one MP asking:

“So when Goldman’s say that they can save 30 percent, that’s not saving cost?”

Dr. Kotsialou drew further light onto the many uses for the technology, with the committee themselves suggesting that it could benefit MPs voting new laws in Parliament, especially for those on maternity leave.

However, it wasn’t long before attention was placed back onto Ripple.  The committee had multiple questions regarding the relationship of the cryptocurrency XRP with Ripple Labs.

Ripple‘s Zagone told the panel that XRP is an open source technology that was not created by them, he said:

“we do own a significant amount of XRP, it was gifted to us by some of the open-source developers that created it.  But there’s not a direct connection between Ripple the company and XRP.”

Asked whether XRP was designed to avoid regulations, Zagone explained that Ripple only sells XRP to institutional investors and not retail consumers, reiterating that they merely use XRP and are not directly connected to it.

MPs went on to question XRP as an asset, stating that it could be a ‘red flag’, MP Stewart Hosie said:

“if people buy XRP, a financial asset from Ripple Laboratories, it doesn’t entitle them to an ownership stake, there’s no right to be converted back into conventional currencies, and it doesn’t pay any return.  It also seemingly has no purpose.”

With the conclusion of the hearing, Dr. Kotsialou suggested that cryptocurrencies should not be stopped, however regulating them and employing inter-disciplinary working groups to do so, could assist in the long term, she said:

“If taxes come, probably the price of many of them would go down, so the bad would go, but it will keep the good and innovative people”