UK Treasury has officially equated Ripple's XRP to cryptocurrencies along with Bitcoin and Ethereum, saying it's not a security.
January 13, 2020 | AtoZ Markets – The UK Treasury (Her Majesty's Treasury) has officially equated the XRP token with cryptocurrencies, refusing to classify it as a security. This is reported in the official decree of the department.
UK Treasury Refuses to Consider XRP as a Security
According to the ruling, XRP, Ethereum (ETH) and Bitcoin are tokens that are used "as a medium of exchange." Since “exchange tokens” are neither electronic money nor securities, they fall under the unregulated category.
We will remind, earlier, the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, accusing it of violating the securities law through the sale of XRP tokens.
The department also classifies security tokens separately. As stated in the resolution, such tokens include assets that are similar in their properties to investment instruments such as stocks or bonds.
Decentralization Beyond Regulation
The UK Treasury recognizes that new forms of cryptoassets like stablecoins could become a widespread means of payment and potentially improve international transactions.
The British government has also proposed not to include the decentralized finance ( DeFi ) market in regulation, although it sees a growing role for the new sector of the crypto economy. The regulator will continue to monitor the new sector and is interested in views on the possible benefits and risks associated with DeFi, the document said.
AtoZ Markets previously reported that the UK government is seeking stablecoins following the UK’s withdrawal from the European Union (EU).
Read also: Ripple Executive Says XRP is Not Competing With Stablecoins
Meanwhile, the Financial Conduct Authority (FCA) has warned cryptocurrency investors that they risk losing all of their assets at any time. The regulator believes that investing in the digital asset market is associated with price volatility, product complexity, and a lack of consumer protection.
Thin we missed something? Let us know in the comment section below.