Big swings in the price of XRP, now the world’s third most valuable cryptocurrency, have largely been driven by one factor in recent months: Rumors that Coinbase, the largest U.S. Bitcoin exchange, will begin offering XRP.
While Coinbase has yet to do so, Brad Garlinghouse, CEO of Ripple, the company that created XRP, argued publicly for the first time Thursday that it should.
Headquartered in San Francisco, Coinbase currently offers buying and selling of Bitcoin, Ethereum, Bitcoin Cash and Litecoin, and will soon add Ethereum Classic, the company announced last week. But XRP, whose roughly $21 billion market capitalization exceeds that of all other cryptocurrencies except Bitcoin and Ethereum, has been passed over—despite reports that Ripple, which owns more than half of XRP’s digital tokens, tried to pay Coinbase $1 million to list it.
Ripple sells its blockchain technology to financial institutions around the world—some of which also use the cryptocurrency XRP to speed up and lower costs of international payments—and has long maintained that XRP’s value is likely to increase the more banks use it.
“As we solve problems at scale for institutions, I think it’s in Coinbase’s interest to participate in that,” Garlinghouse said Thursday in an interview with Fortune’s Jeff John Roberts at CB Insights’ Future of Fintech conference in New York.
Garlinghouse, however, refuted the idea that XRP might fall under the SEC’s jurisdiction.
“I think it’s really clear that XRP is not a security,” he said at the conference. For one, he explained, XRP’s blockchain, or public ledger, “exists independent of Ripple,” and would keep functioning even if the company failed; what’s more, XRP tokens serve a technological purpose (facilitating monetary transactions) that traditional securities like stocks do not. XRP also does not entitle its holders to a stake in Ripple the company itself.