TL;DR
- The European Corporate Governance Institute (ECGI) recognizes XRP as a utility token, not a security.
- ECGI’s recognition supports XRP’s position as a global bridge currency in Ripple Payments.
- The development is expected to influence the widespread adoption of XRP by banks and financial institutions.
The ECGI research paper, titled “Corporate Governance Meets Data and Technology,” delves into evolving fundraising techniques in the blockchain space.
Authored by Wei Jiang from Emory University and Tao Li from the University of Florida, the paper explores various fundraising mechanisms, including Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).
The central focus of the study is the murky regulatory landscape surrounding cryptocurrencies, particularly concerns raised by regulatory watchdogs such as the U.S. Securities and Exchange Commission (SEC) regarding the classification of tokens issued via these fundraising methods.
Notably, SEC chairman Gary Gensler has taken the view that almost all cryptocurrencies, including Ripple XRP, are securities and therefore fall under the agency’s purview.
A federal judge determined last July that XRP sales on public crypto exchanges are not securities
ECGI’s endorsement of XRP’s utility token status gives legitimacy to assertions that XRP is a global bridge currency within Ripple Payments, which could usher in mass XRP adoption by banks and other financial institutions seeking seamless payment solutions.
However, despite this positive news, the regulatory landscape of cryptocurrencies remains complex and subject to interpretation by different regulatory bodies.
All attention now turns to the SEC vs. Ripple lawsuit, with key briefs scheduled for March 22.
These developments are likely to influence market sentiment and the trajectory of XRP.
Despite the encouraging news, the price of XRP has experienced a decline along with the broader cryptocurrency market, trading at $0.6251 at publication time, reflecting a 5.6% decrease in the last 24 hours.
This decline is consistent with the overall market trend, with major cryptocurrencies like Bitcoin, Ethereum, and Dogecoin also experiencing losses.
