Why Did Major Crypto Exchange Coinbase Suddenly Add XRP?

Since the U.S. Securities and Exchange Commission (SEC) began to show aggression towards digital asset offerings, specifically for their occasional security-esque nature, crypto service providers have kept on their toes. Listing the wrong asset, investing in a misaligned project, and participating in a certain blockchain could spell disaster for some hopefuls in this space. Although much of this ambivalence has pertained to smaller projects, like the hundreds of (unregistered) initial coin offerings that reared their ugly heads in 2017’s rally, Ripple Labs has seen discourse regarding the nature of its go-to digital asset, XRP.

Thus, American exchanges looking to stay on the good side of the SEC and similar entities have precluded away from listing XRP, the third cryptocurrency by market capitalization. But, this changed on Monday, as the San Francisco-based Coinbase took the plunge after presumed months, if not years of internal deliberation.

XRP To Trade On Coinbase Pro

Ripple believers across the globe heaved a sigh of long-awaited satisfaction on Monday morning, as Coinbase Pro, the company’s trading platform for non-common Joes and Jills, divulged its intention to list XRP. This was quickly reflected in the value of the asset, which rallied by 11% following Pro’s Twitter announcement.

Related Reading: Crypto Markets Climb After Volatile Weekend, XRP Surges Over 11% Due to Coinbase Listing

Per the release, support for the cryptocurrency, slated to be traded against USD, EUR, and BTC, will first be available for Coinbase clients based in the U.S., U.K., nations in the European Union, Canada, Singapore, and Australia. As of the time of writing this, full trading on the aforementioned pairs has yet to be activated, as Coinbase awaits sufficient supply and order book depth.

Why The About-Face, Coinbase?

Although the sudden listing likely caught many industry insiders with their pants down, as they had their panties in a twist about XRP’s regulatory status, this move may be perfectly logical. Per previous reports, Dan Romero, the current vice president of Coinbase’s institutional division once took to CNBC to explain his firm’s sudden shift in business strategy from Bitcoin-centric to a multi-asset-focus.

Speaking to CNBC’s “Fast Money” segment on the subject matter, Romero remarked that Coinbase is simply responding to the needs of its customers. More specifically, he claimed that a majority of Coinbase’s clients have been to incessantly request for the addition of more digital assets, as there remain hundreds, if not thousands of projects that the American upstart has yet to support. Anecdotally, it has been known that XRP is one of the most sought after cryptocurrencies in this entire ecosystem, making the recent listing all sensible.

In an interview held during Linda Shin’s “Unchained” crypto-centric podcast, Romero elaborated on his firm’s rationale. The executive noted that in a bid to keep customers safe within Coinbase’s gated community, so to speak, the multi-faceted company has embarked on a mission to support as many assets as legally viable.

Romero may be speaking the truth, but cynics argue that the listing of XRP isn’t in line with GDAX’s Digital Asset Framework, a system that was created to evaluate crypto assets and their viability as a part of Coinbase’s already extensive product roster. While there is a serious argument to be made that XRP fits the bill in the “Innovation” and “Equality of Opportunity” departments, some skeptics of the project have argued that the cryptocurrency’s raison d’etre is far from creating a free world backed by decentralization.

Then again, Ripple’s head honchos have pushed the narrative that the XRP Ledger is decentralized, citing the mass of validator nodes/servers owned by institutions and the accessibility that consumers have when it comes to the ecosystem.

Crypto Regulatory Concerns

While what’s done is done, some are wary that Coinbase might have been too rash with its listing of the digital asset, specifically in regards to the uncertainty regarding XRP’s nature in the eyes of regulators, both local and abroad.

Jack Chervinsky, a pro-crypto attorney at the Washington, D.C.-based Kobre & Kim, noted that although community sentiment is pointing to the idea that Coinbase’s recent attempt to appease its pro-Ripple clients confirms that XRP is, in fact, a non-security, this might not be the case. Chervinsky remarked that there are “too many variables at play” to draw any solid conclusions about the asset making it to Pro’s swelling list of tradable assets.

Thus, the Kobre & Kim representative concluded that the only inference that can be logically drawn from this debacle is that “Coinbase believes the benefits outweigh the costs.” But until the SEC and similar regulatory bodies give a conclusive verdict on XRP, it would be hard to say whether the cryptocurrency is more security than not.

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