Concerns over NYDFS Removing XRP from Greenlist
An Australian lawyer, Bill Morgan, recently expressed concerns about the New York Department of Financial Services (NYDFS) removing Ripple’s XRP from its greenlist. This decision could potentially hinder the practical use of XRP in New York and adds an element of caution to the otherwise straightforward regulations set by the NYDFS.
The concerns were raised after a Twitter thread by user WrathofKahneman, who explained the significance of XRP being off the greenlist. The greenlist consists of tokens that are automatically approved for companies with a NY BitLicense to transact with.
WrathofKahneman clarified that the removal doesn’t necessarily mean XRP is doomed in New York, but it will require companies to go through additional vetting processes.
“Companies can still use off-list tokens, but it requires further vetting by NYDFS and a separate DFS-approved coin listing policy in place,” WrathofKahneman explained.
What Does It Really Mean?
The extra layer of regulation could have a significant impact on companies that are unwilling or unable to undergo additional regulatory scrutiny, effectively isolating them from transacting in XRP. This is a concern raised by both Morgan and WrathofKahneman, who believe that larger companies, trusts, banks, custody firms, and fintechs are more likely to pass the higher level of scrutiny.
Both individuals agree that the additional paperwork makes XRP appear “risky,” which could hinder its adoption rate. Despite its established track record, the stringent regulations call into question the implicit trust often associated with tokens on the greenlist.
While some companies may see the removal from the greenlist as a warning sign, it remains to be seen how this will impact XRP’s position in the broader cryptocurrency ecosystem.
Hot Take: Implications for XRP’s Future
The decision by the NYDFS to remove XRP from its greenlist has raised concerns about the practical use and adoption of XRP in New York. The additional regulatory burden and perception of risk associated with being off the greenlist could deter some companies from transacting with XRP. However, larger institutions are more likely to navigate the increased scrutiny and continue using XRP. The impact of this decision on XRP’s standing in the cryptocurrency ecosystem is yet to be fully understood.
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