Cryptoassets are ‘a digital representation of a value or a right which may be transferred and stored electronically, using distributed ledger technology or similar technology.’
There are different types of cryptoassets in operation:
Exchange tokens: which are used as a means of payment and also held for speculative purposes.
Utility tokens: which grants the holder of the token access to a good or service.
Security tokens: which, as the name suggests gives the holder of the token a right or interest in a business akin to a share, bond or option.
Stablecoin: which is a token which is pegged to a currency or asset that maintains a stable value.
Each of these tokens hold different purposes and fall under the broader term of a cryptoasset. Cryptoassets have gained traction for a number of reasons, be that for its ability to open up access to financial services through the creation of new forms of payments or through fractionalised ownership of assets.
As the types and use cases of cryptoassets evolve, so too does the focus from policymakers on the classification of these tokens.