Literal meaning: investment token.
It is known that tokens are created on the basis of the blockchain, and all details of their execution are prescribed in a smart contract.
Security tokens are created to be linked to real securities, that is, they are real financial investments. They are traded on cryptocurrency exchanges.
Regulation of the circulation of investment tokens occurs in accordance with the legal financial regulations of various regions.
For example
SEC (Securities and Exchange Commission, USA)
FINMA (Swiss Financial Market Supervisory Authority)
Companies that issue this asset are required to submit reports to regulators.
In summary, we can summarize that a security token represents a blockchain-based âshareâ of some underlying asset, such as a company, real estate or gold.
#cryptocurrency
