UK Treasury classifies XRP as an exchange token.
- A recent publication from the UK Treasury maintains that XRP is an exchange token
- Document details regulatory approach for cryptocurrencies and stablecoins
- Classification delineates XRP has it faces US SEC lawsuit
A recent document published by the United Kingdom Treasury has maintained that XRP remains an exchange token. Along with this clarification, the UK outlines its regulatory approaches towards cryptocurrencies and stablecoins. In the report, other top cryptos asides from XRP, such as Ethereum and Bitcoin, are described as “tokens used majorly as a means of exchange.” According to the report, exchange tokens are unregulated and cannot be regarded as electronic money or security tokens.
XRP classification backed by previous UK Treasury framework
The recent UK Treasury report served to back previously laid out the United Kingdom Financial Conduct Authority (FCA). This was put forward in 2019. In it, security tokens are defined as ” being similar to specified investments like debt instruments or shares based on the country’s laid down legislation. They are then described as digital, token-based forms of traditional securities.
What this means for XRP
Currently, the California based company faces a lawsuit from the US Securities and Exchange Commission, which deems it an unregistered security. According to the charges, the SEC still sees Ripple as security and regards it as unlisted from its launch time. Ripple continues to point to the previously laid down FCA regulation despite calls for regulation clarification from the United States.
In Ripple’s perspective, clearly stated frameworks like those laid by the Financial Conduct Authority position a country to attract blockchain-related companies, capital, and jobs. Accordingly, countries with poorly drawn-out guidelines run the risk of losing their competitive edge. Without better-regulated markets, they will lose out on these opportunities.