SMQKE, a prominent figure in the XRP community and a crypto researcher, recently shared compelling evidence suggesting that XRP will fall under the jurisdiction of the upcoming MiCA regulation.
This assertion was first made public last month, drawing on insights from two distinct research papers. One of these papers was a detailed report from the Banque de France (Bank of France), the country’s central bank, published in April. The report delved into the realm of Central Bank Digital Currencies (CBDCs) and crypto assets, specifically examining the tokenization of finance and the digitalization of the economy.
Of particular note was the emphasis placed on the Markets in Crypto-Assets (MiCA) regulation in the European Union’s broader efforts to establish a comprehensive framework for digital assets. This framework aligns with the French central bank’s objectives of digitizing the economy and facilitating the tokenization of finance.
The report highlighted that MiCA would encompass stablecoins, utility tokens, and various other crypto assets, including Bitcoin. Interestingly, SMQKE also referenced insights from Delphi Digital and Enoch Chng indicating that XRP could be classified as a utility token.
The argument put forth was rooted in the belief that since XRP was deemed a utility token, it would fall under the purview of MiCA. However, this conclusion was met with some skepticism, as the documents categorizing XRP as a utility token were not formally endorsed by European financial authorities, leaving the question of the EU’s stance on XRP’s classification unresolved.
In subsequent weeks, SMQKE sought to bolster his case by citing a report from the Center of Applied Macroeconomic Analysis at Crawford University, which referenced a document from the U.K. Financial Conduct Authority (FCA) identifying XRP as a utility token.
It is worth noting that the Financial Conduct Authority operates independently from EU financial agencies, a distinction exacerbated by the UK’s withdrawal from the EU in January 2020. As a result, the regulatory perspectives and frameworks in place in the UK may diverge from those of the EU.
The EU’s official stance on whether XRP qualifies as a utility token carries significant implications for XRP’s regulatory status within the bloc. This determination will play a crucial role in shaping how businesses in the EU engage with XRP, particularly in light of the impending MiCA regulation set to take effect soon.
The level of institutional acceptance of XRP hinges largely on its regulatory classification in various jurisdictions. While facing regulatory challenges in the U.S., where it was deemed an unregistered security by the SEC, XRP’s prospects in the EU could encounter obstacles if the EU’s regulatory position remains ambiguous.
Despite the information shared by SMQKE, uncertainties persist regarding the EU’s stance on XRP’s classification. Notable members of the XRP community, such as WrathofKahneman, have previously referenced a report from the European Corporate Governance Institute that highlighted a ruling in July 2023 declaring XRP a non-security when traded on exchanges.
Moreover, Ripple’s Managing Director for Europe and the U.K., Sendi Young, disclosed last year that the company was expanding its presence in the EU. Young expressed optimism that the introduction of MiCA could enhance regulatory clarity for Ripple’s operations in Europe.
As a disclaimer, this content serves purely informational purposes and should not be construed as financial advice. The opinions expressed in this article are personal viewpoints and do not necessarily reflect the stance of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions, as The Crypto Basic assumes no responsibility for financial losses incurred.