Polymesh Glossary


Security token

Like traditional securities, a security token is a financial instrument that represents ownership interest in an asset– only it’s been created digitally (tokenized) to unlock the power of the blockchain. Put simply, security tokens are digital representations of financial securities on a blockchain. Security tokens benefit markets by bringing greater efficiency through automation, increasing global liquidity pools, and facilitating the creation of new and unique financial assets. Because of their digital nature, security tokens may not only represent ownership of traditional assets like publicly traded equity or bonds, but also traditionally illiquid assets like private placements, real estate, or art. As with traditional securities, security tokens are subject to regulation.