Definition ∞ Commodity Tokens are digital assets that represent a claim on a physical or digital commodity. These tokens are typically backed by real-world assets such as gold, oil, real estate, or other fungible goods, allowing for fractional ownership and easier transferability on a blockchain. Their value is intended to correlate directly with the price of the underlying commodity, providing a digital means to invest in or trade traditional assets. They aim to merge the liquidity of digital markets with the stability of physical goods.
Context ∞ The classification and regulation of commodity tokens are ongoing discussions within global financial authorities, aiming to determine how existing commodity laws apply to their digital counterparts. Key debates center on the actual backing and auditability of the underlying assets, ensuring that token holders genuinely possess a claim. Future developments will likely involve more robust regulatory clarity and increased institutional adoption, expanding the range of tokenized commodities available.
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