XRP will be covered by MiCA, but there is a problem

Cryptocurrency researcher and XRP community figure SMQKE shares what he believes is evidence that XRP will fall under the scope of the upcoming MiCA regulation.

First the expert presented his argument last month, citing information from two different research papers. One of the documents was a report from the Banque de France (Bank of France), France’s central bank, from April. THE relationship focused on CBDC and cryptocurrencies, specifically discussing the tokenization of finance and the digitalization of the economy.

MiCA covers utility tokens

In particular, the research paper highlighted the Cryptocurrency Markets Regulation (MiCA). as an integral part of the European Union’s broader push towards implementing a robust framework for digital assets. This framework would be beneficial to the French central bank’s ambition to digitize the economy and tokenize finance.

The report draws attention to the fact that MiCA would cover stablecoins, utility tokens and other crypto assets such as Bitcoin. Interestingly, SMQKE also shared a report from Delphi Digital and a comment from Enoch Chng suggesting that XRP is actually a utility token.

His argument was that since the report considered XRP to be a typical utility token, it fell under MiCA’s purview. However, this deduction was not entirely flawless, as the documents declaring XRP a utility token are in no way linked to European financial authorities. As a result, it is impossible to ascertain whether EU authorities also consider XRP to be a utility token.

Does the EU consider XRP a utility token?

Weeks after its initial disclosure, SMQKE aimed to provide further evidence that XRP was indeed considered a utility token by the EU. He presented research paper from the Center for Applied Macroeconomic Analysis at Crawford University, citing a relationship by the UK’s Financial Conduct Authority (FCA), which defined XRP as a utility token.

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However, it is worth remembering that the Financial Conduct Authority is not an EU financial agency. This is due to Brexit and the UK’s exit from the European Union in January 2020. As a result, the UK’s views and regulations on finance and cryptocurrencies are different from those of the EU.

The importance of XRP’s position in the EU

The EU’s position on the eventuality XRP is a utility token it is central to XRP’s regulatory position within the block. This would be important for how companies in the EU treat or adopt XRP, particularly under the MiCA regulation that comes into force later this month.

The level of institutional adoption of XRP largely depends on its regulatory position within any jurisdiction. It suffered a setback in the United States when the US SEC declared it an unregistered security. Its adoption in the EU could also face a hurdle if the bloc’s regulatory stance is not resolute.

However, despite the SMQKE findings, the European Union’s position on XRP’s position remains unclear at the time of reporting. WrathofKahneman, a leading figure in the XRP community, had previously highlighted a report from the European Corporate Governance Institute, which cited the July 2023 ruling declaring XRP a non-security when sold on exchanges.

Interestingly, Ripple’s CEO for Europe and the UK, Sendi Young, disclosed last year that the company continued to expand in the European Union. According to him, the introduction of MiCA could help with regulatory clarity for Ripple’s European expansion efforts.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.

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