Glossary > Security token
A security token is a form of cryptocurrency. It represents fractions of assets that have real value such as equity, a company, real estate, etc.
In essence, security tokens owners have a stake in an asset. Owners receive a share from the profits of the asset; like owning stock from the company. Securities tokens live on existing blockchains such as Ethereum for example and don’t have a native blockchain, unlike traditional cryptocurrencies. One well-known security token is Blockchain Capital (BCap).
As an investment asset, Security tokens are digital assets that represent ownership or other rights to transfer value from an asset or asset class to a token. In summary, security tokens are the digital form of traditional investments such as stocks, bonds, or other securitized assets.
For example, companies looking to raise funds for expansion projects can decide to issue separate ownership of their company through digital tokens instead of issuing shares. This token can then be offered to investors on exchanges that allow digital security tokens.
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