21Shares Argues XRP Is Utility Token for ETF Access
21Shares argued in U.S. filings that XRP functions as a payment token with a capped supply and urged regulators to clarify classification for spot ETFs.
21Shares, a Swiss asset manager, filed legal documents in U.S. courts and with regulators asserting that XRP should be treated as a utility token rather than a security. The filings say XRP’s primary use is as a medium of exchange and for on‑chain value transfer by payment providers and market participants.
The company argued that XRP’s supply was fixed at issuance and that there is no ongoing token creation tied to the issuer’s fundraising or operational activities. The filings maintain the capped supply reduces financial dependence on an issuer and is inconsistent with an investment contract as evaluated under the Howey test.
21Shares linked its legal arguments to the operational needs of exchange‑traded products. The filings state that asset managers seeking to list spot ETFs need clear regulatory classification before offering funds that would hold or track XRP to U.S. investors.
The documents pointed to market features the firm described as supporting a utility classification: third‑party market infrastructure that facilitates trading, observable use of the XRP Ledger for remittances and inter‑exchange settlement, transparent supply metrics recorded on the ledger, and secondary market trading that does not rely on an issuer to generate value.
The filings were submitted amid ongoing litigation and regulatory review over whether certain crypto assets qualify as securities. U.S. courts have applied the Howey test to token sales, and asset managers have sought clearer standards from regulators for spot crypto ETF approvals.
Industry participants have noted that regulatory and court determinations on token classification could affect whether managers pursue spot ETFs that include tokens like XRP or constrain those offerings if rulings emphasize issuer conduct or fundraising.
21Shares is a Swiss issuer of crypto exchange‑traded products that has sought approvals for spot crypto funds in multiple jurisdictions. XRP is a digital token on the XRP Ledger; public records show a finite total token creation and ledger entries that record token distribution and transfers.
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