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April 21, 2013, 05:09:34 PM |
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Hi, I'm a newbie here, but I've been around the financial industry for a while now, and my question is this:
Wouldn't a ripple gateway that offers fiat currency exchange and provides liquidity normally need to be a chartered bank?
It seems to me that it would - I am almost convinced that it would have to be in order to operate in the US, and probably in most places that customers would feel comfortable wiring money to. I believe this is different from a bitcoin trading site, since BTC is not recognized as a currency under american law. I also see that holding fractional reserves would be a big red flag to regulators as well, if a gateway operator tried to do that.
If I am right, I would predict that people will try to set up "ripple banks" and eventually the US will insist that they apply for charters, meet capital requirements, etc and smaller players will have to fold. If that happens at a point that ripple is popular enough, existing financial institutions will step in and start offering ripple gateways, however, they will assuredly price their services in a way that does not cannibalise existing revenue streams.
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