Potential customers in the U.S. are apparently holding off from using Ripple’s XRP-related services due to regulatory uncertainty.
As Ripple reportedly prepares to relocate its headquarters outside of the United States, it turns out that only 5% of the company’s clients are based in the country, according to the firm’s CEO.
On Dec. 2, Ripple CEO Brad Garlinghouse sat for an interview with CNN anchor Julia Chatterley to discuss Ripple’s regulatory hurdles in operating in the U.S.
According to Garlinghouse, as much as 95% of the San Francisco-based company’s customers are located abroad. He claimed that Ripple’s services are not as popular in the U.S. due to the ongoing regulatory uncertainty around its associate token XRP, Garlinghouse said:
“95% of our customers are non-U.S. customers, and only about 5% are here in the U.S. And people say ‘why you are a U.S. company’ and ‘why is that?’ One of the dynamics is that U.S. companies are waiting for the clarity, and that clarity emanates from the Securities and Exchange Commission.”
Garlinghouse noted that the SEC recognized other major cryptocurrencies like Bitcoin (BTC) and Ether (ETH) as non-securities years ago. However, XRP, the fourth-largest cryptocurrency by market capitalization, still does not have that clarity:
“For us, around XRP and over 100 companies that are working with XRP getting that clarity, it’s very clear to me that XRP is being used by many companies as a currency. You had the U.S. Department of Justice refer to XRP as a currency, you had FinCEN refer to XRP as a currency. But you haven’t yet had that clarity from the SEC.”
According to Garlinghouse, Ripple has had some issues with U.S. customers concerned about the regulatory status of Ripple’s XRP-related offerings.
“Oftentimes when I’m speaking to customers talking to them about our product that uses XRP in the payment flows, they will ask me about regulatory dynamics, and we have had customers saying ‘look until there’s clarity and regulatory frameworks we’re going to hold off,’” the CEO said, adding, “Now that has not been the case because of the clarity and the certainty” in other countries like the U.K.”
Previous comments by Garlinghouse would suggest that Ripple is gunning for the SEC to treat XRP much the same as it has Bitcoin or Ether i.e. by not classifying it as as security. Last month, he said “it’s very hard to look at XRP as a security,” stating that he is “not aware of any market globally that thinks that XRP is a security.”