As governments including China, South Korea, and Russia make moves to regulate cryptocurrencies, the industry as a whole has been unsure how to react. Cryptocurrencies were founded on a principle of decentralization and unregulation, and government intervention of this kind is seen by many proponents as a negative thing.
However, the reaction is far from uniform. In fact, Brad Garlinghouse, the CEO of the third-largest cryptocurrency in the world by market capitalization, feels that government regulation of the industry could be a very positive thing. (See more: Ripple Is Emerging as a Stable and Trusted Cryptocurrency.)
Some Recent ICOs Not Good for the Industry?
In an interview with CNBC this week, the CEO of Ripple asked whether the rush of new digital currencies to hit the market was actually "solving real problems." "There's plenty [of] examples of these recent ICOs that I don't think are good for the industry because they are not demonstrating or solving a real problem, and you are seeing examples of fraud," Garlinghouse said. "And so, I think it's good that you have regulators intervening and stepping in, in countries around the world."
The ICO phenomenon has been one of the primary targets of regulatory pressure in recent months. Much of this likely comes from the prevalence of scam and fraudulent ICO schemes that have been going on since ethereum popularized the process.
ICOs are a way for tech start-ups to raise funds and involve the sale of digital tokens or coins which are exchanged for popular cryptocurrencies like bitcoin. China's government moved to ban ICOs completely, and some other countries are reportedly following suit. (See more: China's ICO Ban Prompts Other Nations to Reconsider.)
Ripple is Focused on Distributed Ledger
Ripple, for its part, seems more focused on continuing to develop its blockchain distributed ledger platform, which Garlinghouse calls a "trillion-dollar problem." If successful, this platform could connect banks, payment providers, and digital currency exchanges in a new way.
That's not to say that ICOs have dropped in popularity among investors. The phenomenon has brought in billions of dollars from investors in just a few months, and ICO funding has outpaced venture capital investments, according to the CNBC report. Celebrities have even taken to endorsing ICOs of late, with public figures like Floyd Mayweather, Ghostface Killah, and Paris Hilton all hawking digital currencies or related startups.
Besides China, South Korea has banned the sale of digital tokens as well. The U.K., the U.S., and Abu Dhabi are all reportedly looking into digital token sales, either issuing warnings or investigating potential instances of fraud. And yet, in spite of the warnings, investors continue to pour money into new ICOs all the time, and the industry continues to grow larger.