Coinbase has taken a significant step by officially classifying XRP and Shiba Inu (SHIB) as currencies. This move highlights the growing adoption of these cryptocurrencies as potential mediums of exchange and reliable stores of value. This classification also aligns XRP and SHIB with more established assets like Bitcoin (BTC) and Litecoin (LTC), positioning them as legitimate digital assets for transactions.
Coinbase’s Bold Move to Classify XRP and SHIB
The inclusion of XRP and Shiba Inu in Coinbase's list of currencies suggests that these tokens possess characteristics essential to functioning as money. According to Coinbase, both XRP and SHIB fulfill the key monetary functions: they serve as units of account, stores of value, and means of exchange. This shift in classification is seen as a critical step for the long-term legitimization of these digital assets, particularly in a market where volatility often dominates the conversation.
The exchange’s move also comes at a time when regulatory clarity for XRP remains uncertain. Following a U.S. federal judge’s ruling earlier this year, XRP was determined not to be a security, although there are still some nuances about its use in specific contexts, particularly regarding investment contracts.
XRP’s Complex Legal Landscape
Ripple (XRP) has been at the center of a highly publicized legal dispute between Ripple Labs, the company behind the cryptocurrency, and the U.S. Securities and Exchange Commission (SEC). The legal battle, which began in 2020, raised questions about whether XRP should be classified as a security. However, a recent court ruling clarified that XRP, in and of itself, is not a security, though its sale in certain investment contracts could fall under that classification.
Coinbase's decision to classify XRP as a currency aligns with past positions from other regulatory bodies. For instance, in 2015, the U.S. Financial Crimes Enforcement Network (FinCEN) had already recognized XRP as a virtual currency, offering some level of precedent for this classification.
Shiba Inu's Role in the Crypto Ecosystem
Although the SEC has not explicitly categorized Shiba Inu (SHIB) as a security, concerns remain in the broader market about the regulatory landscape for tokens like SHIB. The SEC’s admission that crypto assets are essentially “computer code” has added another layer of complexity to regulatory discussions. Despite the uncertainty, SHIB’s growing utility in decentralized finance (DeFi) and its classification as a currency by Coinbase adds further legitimacy to its role in the crypto ecosystem.
Coinbase's Legal Battle with the SEC
The classification of XRP and SHIB as currencies also comes at a time when Coinbase is entangled in its own legal battle with the SEC. The SEC has accused Coinbase of offering digital assets on its platform without proper registration as a securities exchange, broker, or clearinghouse. Coinbase and the SEC are currently in a discovery phase, with a substantial amount of evidence yet to be reviewed. This ongoing case is being closely monitored, as its outcome could have significant implications for the broader crypto industry.
What This Means for XRP and SHIB
Coinbase’s move to recognize XRP and SHIB as currencies is a step toward legitimizing these digital assets for both retail and institutional investors. By categorizing these tokens alongside Bitcoin, Litecoin, and Dogecoin, Coinbase is signaling that XRP and SHIB are not merely speculative assets, but have the potential to serve as transactional tools and reliable stores of value.
This classification could also provide more security for users in the crypto market, which often faces challenges of volatility and legal uncertainty. As the crypto ecosystem continues to evolve, decisions like these may help establish a clearer regulatory framework and promote broader adoption of digital assets for everyday transactions.