Ripple Moves to Require Identification from All Users

All Ripple users received the following email from Ripple Labs this week: 

Later this year, Ripple Labs will enhance identity requirements for Ripple Trade wallets by establishing additional account creation and verification procedures in support of a compliant Ripple network. This will include the collection of additional identifiable information. An ecosystem that supports regulatory compliance builds confidence and encourages new participants to use Ripple and contribute volume to the network._

Ripple is an alternative digital currency, created in 2011, that is the second largest by market cap after Bitcoin. (Ripple's market cap is currently $254M versus Bitcoin's $3.2B Mkt Cap.) For practical purposes, the main difference between the two systems is that Ripple is highly centralized, and tightly controlled by the founding team and Ripple Labs Inc. The centralized nature of Ripple makes it very appealing to banks and regulators, with many banks already supporting the protocol for cheap interbank transfers. The move to identify all users and to track all funds being transferred will please regulators who demand strict Anti-Money Laundering policies. Such a move is not possible with Bitcoin because using it is permissionless with no central entity controlling who can interact with the protocol. 


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