According to a report from the Financial Conduct Authority, XRP is not a security. The UK’s main regulatory body has delved into the long debate about the status of XRP. The FCA (Financial Conduct Authority), the United Kingdom’s major financial regulator has declared that XRP and Ethereum are not securities.
The FCA has no less than 58000 financial services firms to regulate under its watch. The UK’s financial watchdog has said Ripple’s XRP token and Ethereum has several similarities. The regulator went on to say that both of the mentioned coins serve as utility tokens and exchange tokens.
XRP (XRP) Price Today – XRP / USD
The FCA Defined Securities and Utilities
Per the report, in the consultation paper known as “Prohibiting the sale to retail clients of investment products that reference crypto assets,” the UK’s Apex regulatory body while giving a description of the common features of what a cryptocurrency should be and the DLT (distributed ledger technology). The regulator also defines security tokens, and exchange tokens along with utility tokens, before pointing out that, the Bitcoin is a good example of exchange digital assets that don’t fall under its perimeter.
The FCA also highlights that certain tokens, may, however, have mixed features, which automatically make them serve two different purposes an example is as utility and security tokens or as security and exchange tokens. The UK’s financial watchdog also added that the utility tokens can only serve the purpose of electronic money or virtual currency before it pointed out that these tokens can change as time passes or even overlap.
Ripples XRP has Similar Features with Ethereum
While giving its example of digital tokens that typically change as time passes, the FCA says that Ether serves as exchange token via the Ethereum Blockchain. Citing that it can also be utilized as a means to run apps. Hence, the reason why the FCA describes Ether as a utility token. Hence, in this regard, the UK regulatory body posits that Ripple’s XRP coin “has some similar features” with the Ether token. What this means is that XRP serves as both utility and exchange tokens.
Ripple, the company has been working closely with financial regulators all over the world to achieve a single objective which is finding clarity for XRP status as well as determining the viability of digital currencies as a whole. The Ripple network believes this can successfully result in the wider adoption of its XRP tokens and that of the other top cryptocurrency in general. As of July 11, the United States president, Donald J. Trump, suggested that large players like Facebook, who are willing to innovate the technology behind cryptocurrency, should seek banking license moving forward.
Trump Thinks Crypto is Too Volatile
Trump also added that digital currencies (particularly XRP) are too volatile. In his view, they cannot adequately serve the purpose of currency or replace fiat. It is important to say that President Trump’s reaction to crypto has not had any effect on the price XRP. This is a welcomed development unlike in past occasions where cryptos had to dance to the FUDs, especially those that are coming from reputable individuals.