Reading Time: 2 minutes

Cryptocurrencies brought several innovations to the financial market, including the recent security tokens. However, few understand the definition and how works the tokens used in crypto market. Therefore, the news portal specialized in crypto market, Toshi Times, published a article about the security tokens.

The importance of tokens in crypto market

Different than cryptocurrencies, the tokens have his value trailed to a specific environment. To define what is a token can be a very complex task. However, we can look at than as a way to represents a specific value. The Venezuelan currency Petro, is a example of usage of tokens as a currency. In another usage case, SportsFix pretends to use tokens as a way to guarantee the rights of vote and access the content for de users.

In ICOs tokens can guarantee in a very safe way the rights of the investors. So, this system calls the attention for the cost reduction and, at the same time, increase the reliability and transparency. Besides that, many processes of standardization was implemented recently, as the ERC-20 and the ERC-721, bringing even more security.

Security tokens and the SEC

While the tokens grew in adoption, the lack of support from a government agency has scary many investors. Those tokens, called as utility tokens, don’t follows rules of any regulators. However, the security tokens follows the guideline of SEC and, consequently, the federal laws of United States. It means that, if the token issuer break any legal requirement, he will suffer penalties by SEC. So, investor that don’t want to have risks in your business, can add just security token at the portfolio.

It seems a new and revolutionary way for tokens issuance. Certainly, security tokens have potential to dominate the financial market in a near future. With the security tokens, the crypto market has gained a new modality of investment and, consequently, new investors.