Technology

Security tokens

Security tokens are digital assets that represent ownership or a stake in real-world assets such as equity, real estate, or other financial instruments. They are issued and traded on blockchain networks, combining the benefits of traditional securities with the advantages of blockchain technology.

Key features of security tokens

Regulatory compliance

Security tokens are subject to securities regulations (e.g., SEC in the U.S., ESMA in the EU), ensuring they meet legal requirements.

Fractional ownership

These tokens allow for fractional ownership of assets, such as real estate or private equity, making investment more accessible.

Transparency and efficiency

Blockchain ensures greater transparency, lower costs, and faster settlement times compared to traditional securities.

How are security tokens different from other tokens?

Security tokens 

Represent ownership or rights to real-world assets (e.g., stocks, bonds, real estate) and provide holders with a claim on the underlying entity or asset.

Utility tokens

Grant access to a platform or service but do not represent ownership in any underlying entity or real-world asset. While you may have a stake in the platform, it does not equate to ownership in tangible assets.

Benefits of security tokens

Security tokens are seen as a bridge between traditional finance and blockchain, offering innovative solutions for ownership and investment.

Increased liquidity

Easier to trade and transfer ownership compared to traditional securities.

Global access

Blockchain’s decentralized nature allows global investors to participate in tokenized assets.

Reduced costs

By eliminating intermediaries, security tokens can reduce transaction costs and time.