Is crypto regulation good or bad?

An unsexy update on the policing of crypto

Author

Build in Bear
September 11, 2022

Welcome back to another issue of Web3 Seems Legit, the weekly newsletter that dips your toes into the world of web3...just like the dipping price of crypto 😰.

This week, we're giving you an update on the unsexy, but possibly the most important part of web3 - regulation:

  • Ripple Labs continues to pilot CBDC programs. Despite the ongoing SEC lawsuit, this payments firm is continuing to grow and drop hints about their partnerships to push central banking digital currencies (CBDC).

  • SEC says most tokens are securities. The SEC chair, Gary Gensler continues to threaten more regulation and control on the crypto industry to 'protect consumers'...not kill innovation or anything like that 🤷‍♂️.

Ripple Labs continues to pilot CBDC programs

For the past half a decade, countries from all around have been trialing CBDC projects. In other words, digital money issued by central banks.

Why does it matter? In theory, it sounds legit and where our world is headed. Who even uses cash anymore, right? Well, there are a lot of implications to consider if CBDC is ever fully adopted, including the potential of more government power to track and control our activity 🧐.

What's next? It's well speculated that Ripple Labs, issuer of XRP token, is the "chosen" CBDC by the government. Most recently, Ripple announced their partnership with the Digital Dollar Project to further explore CBDC and are teasing that more updates are to come 👀.

Despite this bullish news for Ripple, the price of XRP hasn't really shot up significantly because of an ongoing SEC lawsuit that they've been fighting since 2020.

tl;dr: if Ripple loses the lawsuit, it will be classified as a security and have implications on how other similar cryptocurrencies are regulated. So you could say it's a pretty big deal!

Our take: Whether you think regulation will increase adoption of crypto or harm it, Ripple is an important project to follow that could really dictate the direction of the industry.

SEC says most tokens are securities

Speaking of securities...our favorite crypto cop aka chair of the SEC, Gary Gensler recently spoke at a conference and reiterated that "of the nearly 10,000 tokens in the crypto market, [...] the vast majority are securities." 👮🚨

Why does it matter? Securities are investment assets like stocks, bonds or options regulated by the SEC. If crypto is considered a security, that means tighter rules around token launches to protect consumers. Once again, it sounds legit and all in good intention, but it could also really hinder innovation 🤔.

But at least Bitcoin will be fine though 🤪.

Here are some other newsworthy threads to share:

Like what you're reading? Help us share the love with your IRL or online friends by forwarding this email and letting them know where you get your web3 scoop from! If you have any feedback or suggestions, we'd love to hear from you too. Drop us an email and let us know what you think 😊!

For regular updates and memes, follow us on Twitter 👉 @web3seemslegit