The different tokens
Generally, there are three types of tokens, each with their own specific use case and legal framework. Depending on how liquid the technology is, a specific token can sometimes have additional utility, and in some cases, have hybrid characteristics where it performs two or more functions.
DESCRIPTION
A token that can be exchanged for products and services.
A security token is a digital representation of a traditional security. Such as an ownership position in a company, bonds, and/or other ownership rights.
Used as an alternative medium of exchange.
REGULATION
In most countries, host state regulation is applied.
AML and Securities Legislation binds from the country where the issuance of securities is applied/created.
Dependent on whether the token is used as legal tender.
KYC REQUIRED TO PURCHASE
Currently not required, but it is foreseen to be changed.
Imperative
Not required
SECONDARY MARKET
Possibility of being exchanged in unregulated secondary markets, or in exchanges and markets with specific licenses.
Security laws are applied, thus constraints as to how it can be exchanged in secondary markets.
Possibility of being exchanged in a utility or security token secondary market.
ISSUANCE FORM
ICO/IEO/IDO.
STO.
Dependent on genesis. Whether issued, as a utility or security token.
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