The International Monetary Fund (IMF) has stirred new controversy with its latest update to the Balance of Payments and International Investment Manual, now classifying specific cryptocurrencies as “debt securities.”
Among the digital assets impacted is XRP, a token at the center of longstanding legal and regulatory disputes in the United States.
Since 2009, the IMF has introduced its updated BPM7 guide into circulation, representing the first comprehensive modification to its crypto-asset classification scheme. The revised manual declares that utility tokens that provide future access to goods or services would trigger issuer financial responsibility through ownership rights.
Under this new definition, XRP becomes a debt security with Ethereum and Solana at the forefront of crypto assets.
Also Read: XRP ETP Inflows Surge Over 370 Percent Amid Rising ETF Speculation and Broader Altcoin Outflows
This assessment has set off swift reactions throughout the entire crypto sector. The Chief Technology Officer of Ripple, David Schwartz, confronted the IMF’s statement to argue that their utility token definition would impact almost the entire cryptocurrency market.
According to Schwartz, XRP’s ability to be used for future transaction fees is not unique. He noted that Bitcoin and Ethereum serve similar purposes in their respective ecosystems and would meet the same criteria if the IMF’s framework were applied uniformly.
Ripple CTO Pushes Back Against IMF’s Criteria
Schwartz argued that the IMF’s methodology lacks consistency and could misrepresent the nature of decentralized assets. He emphasized that no major cryptocurrency, including XRP, was issued with the promise of financial claims or liabilities in the way traditional debt securities are.
The comments emerged as a reaction to audience interest after the IMF announced its decision. Some experts in the industry share ironic comments that XRP may stay labeled as a security under worldwide financial criteria.
Schwartz rejected this view because the same assessment logic would also apply to numerous major digital currencies.
The manual’s current version includes guidelines explaining blockchain activities, including mining and staking operations. It suggests service classification for these activities when a nation reports import-export data.
The treatment of token staking earnings rests on whether holders use these funds like stock dividends following their manner of holding tokens.
Ripple continues to face legal challenges in the United States after the Securities and Exchange Commission filed charges in 2020 over XRP sales. Although a 2023 ruling by Judge Analisa Torres determined that public sales of XRP did not violate securities laws, the court held Ripple accountable for unregistered institutional sales.
Conclusion
The IMF’s reclassification has reignited debates about how digital assets should be regulated globally. As Ripple approaches the final stages of its legal battle, this updated framework’s broader implications could shape future crypto asset classification policies.
Also Read: If You Are an XRP Holder, Pay Attention to This
