Definition ∞ Tokenized asset security refers to a digital representation of a real-world asset, such as real estate, commodities, or equities, recorded on a blockchain. These digital tokens grant ownership rights or economic interests in the underlying asset. They are subject to financial security regulations and offer fractional ownership and enhanced liquidity.
Context ∞ The tokenization of assets is a rapidly expanding area within digital finance, frequently covered in crypto news for its potential to democratize investment and streamline capital markets. This approach aims to increase transparency and reduce transaction costs for traditionally illiquid assets. Navigating existing financial laws for these digital instruments remains a key challenge.
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