It’s been more than a year since Ripple has been seeking a major cryptocurrency exchange to list their token. It seems as if Coinbase, the most prominent exchange in the crypto space, would have been an appropriate if not easy match. But apparently, the two companies have not had an easy relationship.
Perhaps there were a few things that Coinbase overlooked, or possibly Ripple did not precisely match certain requirements that Coinbase deemed critical. Regardless, it’s a bit embarrassing when one of the world’s most prominent exchanges, NASDAQ, quickly scoops up a prospect that a “lesser” exchange has made jump through the hoops.
This move tells us something about Coinbase, potentially indicating inefficiency, lack of vision, or preoccupation with “noise” versus sound criteria; at least the kind that NASDAQ deems sufficient if not promising.
The partnership between Nasdaq and Ripple is predicated on one critical factor: market capitalization. With a market cap closing in on $18.9 billion, Ripple has overtaken Ethereum’s space as the 2nd most capitalized crypto in the world.
The potential functionalities, visionary goals, and narratives surrounding each cryptocurrency–all of which hold both promise and value among HODLers and companies in the industry–amount to nothing but noise to Nasdaq.
To Nasdaq, a crypto’s potential is secondary, primarily is what a crypto does in the here and now. And Ripple has matched those qualifications.
“We aren’t interested in the noise. We are interested in scale. If we start this initiative with the top five or seven “security coins” by market capitalization, why would we exclude $XRP? There is no good reason to exclude them, at least the way that we are evaluating our work. Look at it this way – there is just as much noise around Bitcoin Cash as there ever has or ever will be around Ripple’s cryptocurrency. And Bitcoin Cash is listed almost ubiquitously across all exchanges. So we see no reason to exclude $XRP. Instead, we’ve leaned in and embraced what they bring to the table. You really can’t argue that the firm has a top-notch executive team and is as buttoned up as you will find in crypto.”
Proof of functionality, applicability, and capacity to “bring something to the table” trumps speculative potential. But as a regulated exchange, Nasdaq also recognizes that these factors amount to zilch without the mechanisms to exercise due diligence, as another Nasdaq source explains:
“Market cap is just about everything here. Ripple and $XRP could be the second largest cryptocurrency at any moment. So the decision to include them in our initial offerings is an absolute no-brainer. Easy to do based on the firms’ management team and their continued execution within the banking sector. And we’ve largely eschewed the ‘security token’ debate. Market cap is what plays for us as we develop these solutions. Ripple checks that box and then some. Not to mention they’ve been extremely forthcoming from a due diligence standpoint and made several different members of their management team available to us at a moments notice. Adding that to the scale of their coin makes it an easy decision at launch.”
Of course, Ripple’s response, however elated, can’t seem to break away from the typical underwhelming PR-coached canned response:
“Yes, we’ve been in discussions with Nasdaq around their exchange initiative and have been willing to answer any and all due diligence questions. We believe in what we are doing here, our products and services, and $XRP as well. Nasdaq will ultimately be the final arbiter of who gets listed next year, but we believe we will be firmly in that group. Without giving too much away, the excitement around here for where this is headed is pretty fun to watch. The Nasdaq exchange and custody product is going to be something special.”
It’s funny to note what this person is saying: we believe in what we’re doing here, our products, our services? We certainly hope so! But again, that’s the nature of corporate canned speech.
Once this partnership goes through, once Ripple finds its $XTP token listed on the Nasdaq exchange, Ripple may decide that it no longer has “to move heaven and earth” just to be included in a closed ecosystem as that offered by Coinbase.
As a Ripple employee explains:
“This inclusion justified I might add, gives us less interest in taking whatever unnecessary steps Coinbase would have us take to meet any listing standards they deem relevant. So while it would be welcome to finalize a $XRP listing on Coinbase we simply aren’t interested in moving heaven and earth to do so.”
Given the regulatory environment surrounding US financial products and services, this inclusion, marking an emerging instance in the crypto space, may bring forthcoming changes to the entire industry.
For now, it evidences a notable trend: institutions are now taking seriously what HODLers have foreseen for years.