May 16, 2023
Dear Securities and Exchange Commission (SEC),
I am writing to provide arguments supporting the classification of XRP as a bridge coin rather than a security. As an entity responsible for investor protection and market integrity, it is essential to understand the unique characteristics of XRP and its role as a digital asset in the cryptocurrency landscape.
XRP is primarily designed as a bridge currency, acting as a facilitator for seamless and efficient cross-border transactions. Its purpose is to bridge the gap between different fiat currencies, enabling quick and cost-effective transfers of value. Unlike traditional securities, XRP does not represent ownership or equity in any underlying company or project.
One crucial distinction is that XRP's value is not derived from the performance or efforts of a centralized entity. It is not issued through an initial coin offering (ICO) or fundraising mechanism that promises future profits. Instead, its value is driven by its utility and demand as a transactional tool within the Ripple network, as well as its liquidity and acceptance in various exchanges.
Furthermore, XRP operates on a decentralized blockchain network, separate from the Ripple company. While Ripple Labs has played a pivotal role in developing and promoting XRP, it does not have direct control over the token's supply, distribution, or price. The network's consensus mechanism, known as the XRP Ledger, is maintained by a diverse group of validators across the globe, ensuring the decentralized nature of the asset.
By classifying XRP as a bridge coin, the SEC would acknowledge its primary function as a means of facilitating transactions, rather than an investment instrument. This classification would provide clarity to market participants, allowing them to utilize XRP for its intended purpose while abiding by appropriate regulations and compliance standards.
I kindly request the SEC to consider the unique characteristics of XRP and the significant role it plays in enabling seamless cross-border transactions. Recognizing XRP as a bridge coin would promote innovation, foster adoption, and contribute to the growth of efficient global payment systems.
Thank you for your attention and consideration in this matter. I trust that the SEC will carefully evaluate the arguments presented and make an informed decision regarding the classification of XRP.