There’s been quite a bit of speculation over whether or not XRP is a security token. However, a new report by the Luxembourg Private Equity and Venture Capital Association (LPEA) quells any such concerns.
Although the U.S. Securities and Exchange Commission has formally said Ethereum is not a security, there has been nonetheless some existing speculation over this also applies to Ripple’s XRP. XRP is used as a payment token to facilitate cross-border payments, and although Ripple is no stranger to security tokens, they nonetheless don’t consider XRP to be one.
According to a new report produced by the Luxembourg Private Equity and Venture Capital Association (LPEA), XRP is most definitely not a security. Alongside Bitcoin, XRP is a payment token according to the newly-released report.
The LPEA is a major body within Luxembourg. They are representatives of the private equity and venture capital professionals in the country. As such, they are heavily involved in the development of the country’s investment network so this report comes with much institutional weight. The LPEA has some 170 members.
XRP is a “Payment Token”
The report was more generally on security tokens and their legal aspects which brought together a wide-range of cryptocurrency and financial experts. XRP belongs to the “Payment Token” category, a rarity in the cryptocurrency sphere. As a payment token, “holders have no right to claim against the issuer” since the system is decentralized.
The news should come as a relief to Ripple fans who might have been concerned the law would turn against them. You can now rest easy: XRP is most probably not a security. However, we still need to wait on formal announcements confirming this.
Do you agree with the report’s conclusions? Is XRP definitely not a security? Let us know your thoughts below.
Image courtesy of Luxembourg Private Equity Association.