A prominent crypto researcher and member of the XRP community known as SMQKE recently shared compelling evidence suggesting that XRP will fall under the jurisdiction of the upcoming MiCA regulation.
SMQKE first presented his argument last month, drawing information from two distinct research papers. One of these papers was a report from the Banque de France (Bank of France) in April, which delved into central bank digital currencies (CBDCs) and crypto assets, focusing on the tokenization of finance and digitization of the economy.
The research paper highlighted the Markets in Crypto-Assets (MiCA) regulation as a crucial component of the European Union’s efforts to establish a comprehensive framework for digital assets. This framework aligns with the French central bank’s goals of digitizing the economy and tokenizing finance.
Of particular note, the report emphasized that MiCA would encompass stablecoins, utility tokens, and other crypto assets like Bitcoin. SMQKE further referenced a report from Delphi Digital and insights from Enoch Chng, suggesting that XRP could be classified as a utility token.
While SMQKE argued that XRP’s categorization as a utility token under MiCA was plausible, it is important to note that the documents labeling XRP as such are not affiliated with European financial authorities. Therefore, it remains uncertain whether EU regulators share the same perspective on XRP’s classification.
In subsequent weeks, SMQKE attempted to provide additional evidence supporting XRP’s status as a utility token within the EU. He cited a research paper from the Center of Applied Macroeconomic Analysis at Crawford University, referencing a report from the U.K. Financial Conduct Authority (FCA) that recognized XRP as a utility token.
However, it should be acknowledged that the Financial Conduct Authority operates independently from EU financial agencies following Brexit. This divergence in regulatory frameworks underscores the importance of understanding how XRP is perceived within the EU.
The EU’s stance on XRP’s classification as a utility token carries significant implications for its regulatory status within the bloc. This designation will influence how businesses in the EU engage with or adopt XRP, particularly under the forthcoming MiCA regulation.
The level of institutional adoption for XRP hinges on its regulatory standing across jurisdictions. While facing challenges in the U.S. due to SEC scrutiny, XRP’s prospects in the EU could be similarly impacted if regulatory clarity is not established.
Despite insights from SMQKE and other community members, the European Union’s position on XRP’s classification remains ambiguous. Notably, Ripple’s Managing Director for Europe and the U.K., Sendi Young, revealed plans for the company’s expansion in the EU, leveraging MiCA for regulatory guidance.
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