The United Kingdom government appears to be cementing its position that XRP is an exchange token and not a security.
Her Majesty’s Treasury has published a new document outlining the UK’s regulatory approach to cryptocurrencies and stablecoins.
The report classifies XRP, Ethereum and Bitcoin as “tokens that are primarily used as a means of exchange.” So-called “exchange tokens” fall under an “unregulated” category that means they are neither e-money nor security tokens.
The HM Treasury report was referencing a framework that the UK Financial Conduct Authority (FCA) laid out in 2019.
Explains the Treasury,
“Security tokens have characteristics akin to specified investments, like a share or a debt instrument, as set out in UK legislation. Broadly, these are likely to be tokenised, digital forms of traditional securities.”
The classification matters to Ripple, because the San Francisco-based payments company is fighting a lawsuit from the U.S. Securities and Exchange Commission that alleges XRP was an unregistered security upon its launch and remains a security to this day.
Ripple has previously highlighted the UK FCA classification amid its calls for regulatory clarity from the United States.
“Countries that take the lead on these frameworks will be better positioned to attract capital, companies and jobs – particularly since blockchain technology is here to stay. Regions that have unclear guidelines should establish their own frameworks to remain competitive and avoid losing companies to better regulated markets.”
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/kkssr