SEC Clarifies Staking Not Securities XDC Network Rises 7th on CoinMarketCap

The U.S. Securities and Exchange Commission (SEC) has provided clarity on the regulatory status of staking activities on Proof-of-Stake (PoS) networks, stating that certain protocol staking activities do not constitute securities transactions under federal law. This announcement is a significant development for PoS networks and their participants, as it clarifies that staking rewards are considered compensation for services provided to the network, rather than profits derived from the efforts of others. This distinction is crucial as it aligns with the Howey Test, a key criterion for determining securities, thereby alleviating previous concerns about the regulatory status of staking activities.

This regulatory update has encouraged broader participation in PoS networks such as Ethereum, XDC Network, Solana, Cardano, Toncoin, and many more. The XDC Network, in particular, has achieved a notable milestone by ranking in the top 7th position among PoS cryptocurrencies on CoinMarketCap. This ascent reflects XDC's growing prominence in the blockchain ecosystem, particularly in enterprise applications and real-world asset tokenization.

Launched in 2017 and went live in 2019, the XDC Network operates as an enterprise-grade, EVM-compatible blockchain utilizing a Delegated Proof-of-Stake (DPoS) consensus mechanism. Its infrastructure is designed to facilitate fast, low-cost transactions, making it suitable for applications in trade finance, cross-border payments, and asset tokenization. The network's commitment to regulatory compliance is evident through its integration with the ISO 20022 financial messaging standard, ensuring compatibility with existing financial systems.

XDC Network has partnered with various governmental bodies to advance blockchain adoption. For instance, it has integrated with Singapore's IMDA TradeTrust framework to facilitate the creation and financing of Model Law on Electronic Transferable Records (MLETR)-compliant digital trade documents. Additionally, the network is collaborating with SERPRO, Brazil's federal data processing service, to implement blockchain-based KYC and AML verification systems. XDC also serves as the underlying technology for Zanzibar's National Blockchain Sandbox initiative to stimulate digital asset and blockchain technology growth. Furthermore, XDC is recognized as legal tender for payments and digital asset use in Panama and Indonesia, with ongoing use case exploration in countries like the UAE, Brazil, Nigeria, and Kazakhstan through regulated token partnerships.

XDC Network's infrastructure supports various real-world applications. Through platforms like TradeFinex, XDC facilitates the digitization of trade finance instruments, enhancing efficiency and transparency. The network also enables the tokenization of real-world assets, such as U.S. Treasury bonds and private credit, providing liquidity and broader access to investment opportunities. Partnerships with entities like Bitso Business leverage XDC's infrastructure to enable low-cost, instant cross-border transactions, particularly between the U.S. and Mexico.

In 2024, the XDC Network released the XDC 2.0 whitepaper, introducing its next-generation consensus model based on Chained HotStuff BFT. This upgrade is central to the network’s enhanced performance, including 3-second finality, improved security, and deflationary tokenomics — key features aligned with enterprise and public-sector demands. Notably, XDC 2.0’s architecture is engineered for regulatory clarity, with explicit support for account abstraction, compliance-friendly staking, and KYC-integrated dApps — all of which align strongly with the SEC’s recent recognition of protocol staking as non-securities-based activity. The whitepaper demonstrates a clear roadmap for scaling institutional use while preserving decentralization.

XDC Network's strategic focus on regulatory compliance, governmental partnerships, and real-world applications positions it as a formidable contender in facilitating the digital transformation. As the blockchain industry continues to evolve, XDC's enterprise-grade solutions are poised to play a significant role in the broader adoption of blockchain technology.