David Schwartz Criticizes Suggestions That XRP Is a Security

Ripple CTO David Schwartz has slammed suggestions that XRP is a security under the IMF’s definition of a utility token. Last week, the International Monetary Fund (IMF) released the first update to its Balance of Payments and International Investment Manual since 2009, which now includes cryptocurrencies.

While the update highlights the growing acceptance of cryptocurrencies, the IMF’s classification of these assets has been controversial. The IMF’s new Balance of Payments Manual, BPM7, classifies crypto assets based on whether they impose a financial claim or liability on the issuer. While the IMF argues that Bitcoin does not impose this liability due to the mining process, it suggests utility tokens — often referring to altcoins — do. He argues that these assets are “debt securities” that offer holders future access to goods and services.

If the IMF’s definition of utility tokens is taken literally, it could classify not only XRP but also other major assets like Ethereum and Solana as “debt securities.” Ripple’s CTO emphasized that he is not aware of any major token that meets the IMF’s definition of a utility token.

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