Security Tokens
Security tokens are digital representations of ownership or rights to an asset, such as equity, debt, or real estate, that are issued and transferred on a blockchain. They enable the tokenization of traditional financial assets, making them more accessible, liquid, and efficient to trade. Security tokens are subject to regulatory compliance, distinguishing them from utility tokens that provide access to a service.
Developers should learn about security tokens when working in fintech, blockchain, or decentralized finance (DeFi) projects that involve asset tokenization, as they are crucial for creating compliant digital securities. This knowledge is essential for building platforms that issue, manage, or trade tokenized assets, ensuring adherence to regulations like SEC rules in the U.S. or similar frameworks globally.