Ripple has officially asked the U.S. Securities and Exchange Commission (SEC) to establish live, real-world testing environments—known as crypto sandboxes—to foster innovation and modernize the country’s approach to digital finance.
In a detailed letter sent on May 28, Ripple made the case for a major shift in how digital asset products like tokenized real-world assets (RWAs) are regulated in the U.S. The company believes that only by testing these products under real market conditions can regulators truly understand how emerging technologies interact with existing financial rules—and where those rules fall short.
A Call for Regulatory Modernization
According to Ripple, the current approach to crypto oversight is outdated and stifling innovation. While many regulators prefer a cautious approach with small-scale pilots, Ripple argues that these limited experiments don’t go far enough. Instead, the company is urging the SEC to create regulatory sandboxes that simulate real-world market environments.
“Regulatory sandboxes should go beyond limited, small-scale pilots,” Ripple said in the submission. “They should simulate production-like conditions, enabling firms to test products and infrastructure under circumstances that closely mirror real market environments.”
In other words, Ripple wants to see digital asset products tested under realistic conditions: with actual customers, real transaction volumes, and even cross-border interactions. The company believes this is the only way regulators and innovators can work together to create smart, future-proof policies.
Why Sandboxes Matter
A regulatory sandbox is a controlled environment where companies can test new technologies under the watch of regulators. In the world of digital assets, these sandboxes are seen as essential for encouraging innovation while ensuring that consumer protections and financial stability are maintained.
Ripple believes that sandboxes will allow both sides—industry players and government agencies—to learn from one another in real time. This, in turn, could help highlight gaps in the current legal framework and identify areas where updated rules or new guidance are needed.
“We believe a regulatory sandbox for digital asset products, like tokenized RWAs, allows digital asset markets, innovative products, and value-creating services to operate in a controlled environment while subject to regulatory oversight,” Ripple wrote.
Global Inspiration: The U.S. Is Falling Behind
To support its case, Ripple pointed to examples from other countries that have already embraced similar frameworks. These include:
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Singapore’s Project Guardian – A joint effort by the Monetary Authority of Singapore (MAS) and major financial institutions to explore tokenization and decentralized finance (DeFi).
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The European Blockchain Regulatory Sandbox – A program allowing blockchain-based solutions to be tested across EU member states in collaboration with regulators.
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The UK’s Digital Securities Sandbox – Designed to test digital securities under conditions that mimic real-world trading and market activity.
Ripple argued that these international examples show how innovation and regulation can go hand in hand. The result? More responsive financial policies, better-prepared institutions, and smoother integration of new technology into existing systems.
“The U.S. risks falling behind if it doesn’t adopt similar mechanisms,” the company warned.
Ripple’s Ongoing Push for Clarity
This isn’t the first time Ripple has asked for clearer regulations around digital assets. The company has been locked in a legal battle with the SEC for years over whether XRP, its native cryptocurrency, should be classified as a security. While that case continues to unfold, Ripple’s latest proposal takes a more collaborative tone.
By calling for structured testing environments, Ripple is signaling that it’s not just fighting for its own interests—but pushing for an ecosystem where crypto innovation and consumer protection can grow together.
The Real-World Element Is Crucial
One of Ripple’s main points is that any sandbox effort must reflect the real conditions under which crypto products operate. That means:
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Real customers: Not just simulated users or developers.
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Real transaction volumes: Enough scale to test how systems hold up under pressure.
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Cross-border functionality: Since crypto is global by nature, the testing must account for international elements.
By including these components, Ripple believes regulators will gain a far better understanding of how crypto tools perform in practice—and where current policies may be lagging.
What’s Next?
Ripple’s proposal now sits with the SEC’s Crypto Task Force, a division created to better understand and regulate the fast-evolving digital asset space. While there’s no immediate indication of how the SEC will respond, the growing number of voices calling for smarter crypto regulation suggests that Ripple’s ideas may gain traction.
In the meantime, the debate over how to regulate crypto continues to heat up in Washington, especially as lawmakers push for broader financial innovation while maintaining market integrity.
Final Thoughts
Ripple’s push for real-world regulatory sandboxes is more than just a policy proposal—it’s a sign of the growing demand for smarter, more adaptive rules in the digital finance space.
With global competitors moving ahead, the U.S. must decide whether it wants to lead or lag behind in the future of crypto. Ripple has made its stance clear: the time for small pilots is over. What the industry needs now are bold, real-time, and collaborative solutions—and it’s calling on the SEC to deliver.
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