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Haider Jamal

Mar 20, 2024

XRP Officially Recognized As A Utility Token By ECGI

Enthusiastic members of the XRP community are rejoicing over a recent development that could significantly influence the future of the Ripple-supported token. A fresh research paper by the European Corporate Governance Institute (ECGI) has reinforced the classification of XRP as a utility token, aligning with a U.S. federal court ruling in July 2023.

 

Addressing The Legal Classification

The paper, titled Corporate Governance Meets Data and Technology, authored by Wei Jiang of Emory University and Tao Li of the University of Florida, examines the evolving landscape of fundraising methods in the blockchain sphere. It explores various fundraising avenues, including Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).

The primary focus of the research lies in the ambiguous regulatory environment surrounding cryptocurrencies, particularly highlighting concerns raised by regulatory bodies like the U.S. Securities and Exchange Commission (SEC) regarding the categorization of tokens issued through these fundraising mechanisms.

Notably, SEC chairman Gary Gensler has maintained the stance that nearly all cryptocurrencies, including XRP, should be treated as securities and thus fall under the jurisdiction of the SEC. However, a federal judge ruled last July that XRP transactions on public crypto exchanges do not qualify as securities.

 

Focus Shifts To Key Date In SEC Vs. Ripple Case

The affirmation by ECGI concerning the utility token status of XRP lends credibility to claims that the cryptocurrency serves as a global bridge currency within Ripple Payments (formerly RippleNet), facilitating real-time and cost-effective cross-border transactions. This could pave the way for widespread adoption of XRP by banks and other financial institutions seeking efficient payment solutions.

Attention surrounding the SEC Vs. Ripple lawsuit has now shifted to March 22nd, the day when the securities regulator will present crucial opening briefs on the proposed Ripple remedies. Reputable defense attorney James K. Filan highlighted that the opposition brief by Ripple representatives is expected by April 22nd, 2024, followed by the reply brief of the SEC two weeks later, on May 6th, 2024.

 

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