The UK government seems to strengthen its position that XRP is not a security but an exchange token.
Statement from the Ministry of Finance
The Ministry of Finance has released a new document outlining the UK’s regulatory approach to cryptocurrencies and stablecoins.
The report classifies XRP, Ethereum and Bitcoin as “tokens primarily used as a medium of exchange”.
The report refers to a framework that the UK Financial Conduct Authority (FCA) put forward in 2019.
The Ministry of Finance explains this situation as follows:
“Securities tokens have characteristics similar to certain investments such as stocks or debt instruments, as specified in UK legislation. Generally, these can be tokenized, which are digital forms of traditional securities. “
Classification is important
Classification is important to Ripple because the San Francisco-based payment company is struggling with a lawsuit from the U.S. Securities and Exchange Commission claiming that XRP was an unregistered security when it was launched and remained a security to this day.
Ripple had previously highlighted the UK FCA classification amidst calls for regulatory clarity from the United States.
“Countries that lead in these frameworks are in a better position to attract capital, companies and businesses. Regions with unclear guidelines must establish their own frameworks to remain competitive and not to lose companies in better regulated markets. “