Token Classification Standards

Definition ∞ Token classification standards are systematic criteria used to categorize different types of digital assets based on their characteristics, utility, and underlying economic functions. These standards help distinguish between security tokens, utility tokens, stablecoins, and other asset classes. Clear classification aids in applying appropriate regulatory frameworks and legal definitions. It reduces ambiguity for issuers and investors.
Context ∞ The establishment of clear token classification standards is a central regulatory challenge for governments worldwide seeking to oversee the digital asset market. Various jurisdictions are developing their own criteria, leading to a fragmented global regulatory landscape. Industry participants frequently advocate for consistent standards to foster innovation and provide legal certainty for project development and market operations.