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Crypto Dictionary

Security Token

Definition

A token that represents ownership of an asset, such as a stock or real estate.

Deep Dive

A security token is a digital asset that represents ownership of an underlying real-world asset, such as equity in a company, real estate, bonds, or investment funds, through tokenization on a blockchain. Unlike utility tokens which grant access to a service, security tokens are designed to function as traditional securities but with the added benefits of blockchain technology, including fractional ownership, increased liquidity for illiquid assets, global accessibility, and faster settlement times.

Examples & Use Cases

  • 1Tokenized real estate shares
  • 2Digital bonds
  • 3Equity tokens in a startup

Related Terms

TokenizationSTO (Security Token Offering)Digital Asset

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