Ripple Questioned by UK Parliament At Blockchain Hearing
At Tuesday’s hearing regarding blockchain technology and cryptocurrencies held at the UK Parliament, Ripple was put on the defensive after a former developer criticized the company’s products.
It was reported that Martin Walker, who is the director of Centre for Evidence-Based management that also worked as a former product developer at blockchain consortium R3, continuously criticized Ripple’s XRP cryptocurrency and blockchain platforms. He went on to say that the technologies were unlikely to fix the problems in the country’s financial segment.
Walke maintained that Ripple’s technology doesn’t provide anything more than the current SWIFT messaging system, stating that “the hard thing about tracking payments is actually getting the people involved in the payments to actually upload the status.”
“So simply having a blockchain doesn’t actually get people to update the status of where the payment is,” he continued.
Walker also didn’t spear the company’s pilot projects that propose to use XRP as a way of bridging two currencies in an international transaction.
“You have the concept of a crossing currency to deal with that scenario where there’s a lack of liquidity,” Walker explained.
“You need someone to provide the liquidity to be able to change into and out of Ripple. And holding Ripple, a currency which has seen its price drop 80 percent and then backs up 100 percent in the course of the last two months, is just not credible. So, putting cryptocurrencies into the financial sector is a huge source of risk.”
The ministers at the hearing also voiced concerns regarding Ripple, stating that they were wary of XRP’s connection to Ripple Labs.
Member of Parliament Stewart Hosie observed that “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.”
Ryan Zagone, Ripple’s director of regulatory affairs, said: “that’s a common misconception.”
“XRP is open source and it was not created by our company, so that existed as an open source technology,” said Zagone. “We created a company that was interested in modernizing payments and then began using that open-source tech to do so … We didn’t create XRP … 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.”