Ripple CTO Criticizes IMF’s Definition of Utility Tokens

Ripple’s CTO David Schwartz has criticized the notion that XRP fits the IMF’s definition of a utility token.

Last week, the International Monetary Fund (IMF) updated its Balance of Payments and International Investment Manual for the first time since 2009, which now includes cryptocurrencies.

While the update illustrates the increasing acceptance of cryptocurrencies, the IMF’s categorization has sparked controversy. The new Balance of Payments Manual, BPM7, classifies crypto assets based on whether they create a financial claim or liability for the issuer. The IMF contends that Bitcoin does not create such a liability due to the mining process. However, it implies that utility tokens—often referring to altcoins—do impose these liabilities, categorizing them as “debt securities” that provide holders future access to goods and services.

If the IMF’s definition of utility tokens is taken literally, it could categorize not only XRP but also other significant assets like Ethereum and Solana as “debt securities.” Schwartz emphasized that he is unaware of any significant token that fulfills the IMF’s criteria for a utility token.

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