Security Tokens vs Tokens

Within tokenization, not all tokens are created equal. The category of “security tokens” — as opposed to purely speculative or utility tokens — matters especially for real-asset projects.

• A security token is a digital representation of a traditional financial security or claim, structured to comply with regulatory frameworks. Outlook India+2Wikipedia+2

• Security tokens can inherit many of the advantages of RWAs: fractional ownership, tradability, transparency, global access — while also offering regulatory compliance. Outlook India+2Openware+2

• This compliance angle helps address one of the main criticisms of early cryptocurrencies and utility tokens: legal ambiguity and lack of transparency. Security tokens aim to bring security (in the regulatory meaning) to blockchain-based investments. Outlook India+1

For a project built on a security-token model, the benefits of RWA tokenization — liquidity, accessibility, transparency — become more tenable in a regulated environment. That makes security-token-based RWAs a more mature, long-term-oriented bridge between TradFi and crypto.