Japan is not the only country to have released a statement saying it does not recognize XRP has a security. Financial authorities in the United Kingdom have the same position.
Authorities in Japan have said that they do not consider the XRP token closely connected to Ripple‘s solutions to be a security. This was made known via a report by The Block.
According to the report, the Japanese Financial Services Agency (FSA) said that the token does not fulfill the criteria of being called a security under the laws of the country. In the statement attributed to the Agency, the FSA says it regards XRP as a cryptocurrency based on the definitions of its Payment Services Act.
The Act defines digital assets to be cryptocurrencies or virtual currency that can be used as a payment method to a person and it is also not denominated in a fiat currency. The FSA went on to clarify that a “virtual currency” could be a property value that can be used for the payment of goods or can be purchased between individuals. This currency can also be transferred through means of an electronic data processing system.
FSA went on to say that this currency is recorded only on an electronic device or through an electronic means. As such, currency-denominated assets are recognized to be those denominated by the Japanese currency of any other foreign currency.
FSA in Japan Mirrors FCA in UK on Its Stance on XRP
Japan is not the only country to have released a statement saying it does not recognize XRP has a security. Financial authorities in the United Kingdom have also said that they believe that the XRP alongside other crypto assets like Ethereum and Bitcoin are exchange tokens.
The authorities made this known via a document published by the British Treasury. According to these documents, the earlier mentioned tokens are “unregulated” meaning that they are not recognized to be e-money or security tokens.
The UK’s Financial Conduct Authority had earlier published a guide in 2019 where they had stated that tokens like XRP, Bitcoin and Ethereum fell outside of the digital assets that the watchdog could regulate.
As per the new document, security tokens are said to be investments like shares or a debt instrument that is recognized by the country’s law.
UK and Japan’s View Backs Ripple’s Claim
Ripple has assiduously denied any wrongdoing against the Securities and Exchange Commission (SEC). The Commission had filed a lawsuit alleging that the crypto company was selling unregulated security in the guise of a crypto token to the public.
However, the San Francisco firm has said that this was false and had promised to stand up on behalf of the crypto community against the regulator.
Its case appears to be backed in light of the statements made by the financial authorities in Japan and the UK who have accepted that the token is not security.
Grayscale Liquidates Its XRP Trust
Leading crypto trust firm, Grayscale investment, has announced that it would be dissolving its XRP Trust citing the lawsuit filed by the SEC against the crypto firm.
According to Grayscale, it was important to take this step now as the United States has become increasingly hostile to XRP. So in its bid to protect its US investors, the Trust has to be dissolved.
The company also noted that converting XRP into fiat US currency is going to be much more difficult in the future.