Financial Conduct Authority (FCA), the United Kingdom’s financial regulator with over 58000 financial services firms under its regulatory watch, has said Ripple’s XRP and Ethereum have similarities, pointing that the two serves as utility token and exchange token.
In a consultation paper tagged “Prohibiting the sale to retail clients of investment products that reference cryptoassets”, the regulatory body while describing the common features of cryptocurrency and the distributed ledger technology (DLT) defines security tokens, exchange tokens and utility tokens, pointing that Bitcoin is an example of exchange tokens that do not fall under its regulatory perimeter.
FCA says some tokens, however, have mixed features, making them serve two purposes i.e. utility tokens and security token, or security tokens and exchange tokens, or utility tokens and exchange tokens.
Adding that utility tokens can serve the purpose of e-money, FCA pointed that tokens can change over time or overlap.
In its example of tokens that can change over time, FCA says Ether serves as exchange token on the Ethereum platform and can also be used to run applications, hence, the reason it says it is a utility token.
In this regard, the regulatory body avers that Ripple’s XRP “has similar features” with Ethereum, meaning it serves as utility tokens and exchange tokens.
Ripple has been working hand in hand with financial regulators across the world to achieve clarity for XRP and viable digital currencies at large.
Ripple believes this can result in wider adoption for XRP tokens and cryptocurrency in general.
Yesterday, the president of the United States of America, Donald J. Trump, has suggested that firms, like Facebook, willing to innovate cryptocurrency, seek banking license.
He said cryptocurrency are too volatile and cannot serve the purpose of currency.
His reaction to cryptocurrency has no effect on the price of the digital currency, unlike in the past where cryptocurrency dance to FUDs, especially the once coming from reputable people.
Instead, the cryptocurrency market is in green at the time of writing, with Bitcoin changing hands at $11,693, and Ripple’s XRP trading around $0.34.