UK Treasury reiterates that XRP is a trading token, not a security

The UK Treasury has reiterated its position that XRP is a trading token rather than a security in a newly released document.

In the latest document, the UK Treasury outlined 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." These "exchange tokens" fall into the category of "unregulated," meaning they are neither digital currencies nor security tokens.

The report from the UK Treasury refers to the regulatory framework set out by the UK Financial Conduct Authority (FCA) in 2019. The department said, "Securities tokens have characteristics similar to specific investments defined under UK legislation, such as shares or debt instruments. Broadly speaking, they are likely to be tokenized, digital forms of traditional securities."

The UK’s comments are important for Ripple, which is facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) that alleges XRP was an unregistered security when it was launched and remains a security.

According to Bitpush, Ripple also emphasized the classification of the UK FCA when calling on the United States to clarify its regulation. The company said, "Countries that take the lead in developing these frameworks will better attract capital, companies and jobs because blockchain technology will always exist. Regions with unclear regulations should establish their own frameworks to remain competitive and avoid companies from losing to better regulated markets."

Ripple CEO Brad Garlinghouse previously said that 95% of the company's customers are outside the U.S. Due to regulatory uncertainty, potential customers in the U.S. are reluctant to use Ripple's XRP-related services.

As a response, Ripple may move its headquarters to countries with clear regulatory policies such as the United Kingdom, Japan or Singapore.

Image source: Ripple

AuthorLiang Che

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