Definition ∞ Digital Tokens are cryptographic assets representing value or rights on a blockchain network. Unlike native cryptocurrencies, tokens are built upon existing blockchain platforms, adhering to specific technical standards like ERC-20 for Ethereum. They can represent diverse assets, including utility access, security ownership, or real-world goods. Their functionality is defined by smart contracts, enabling programmable value and utility within decentralized applications.
Context ∞ The regulatory classification of Digital Tokens remains a central point of discussion, influencing their issuance, trading, and taxation. Debates persist over whether certain tokens constitute securities or commodities, impacting market access and investor protections. Future developments anticipate further diversification of token applications, including their use in decentralized autonomous organizations and supply chain management.
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