Definition ∞ Utility tokens are digital assets providing access to specific products or services within a blockchain-based ecosystem. These tokens grant their holders the right to use or consume network functions, often serving as a payment method for fees or for accessing features within a decentralized application. They are not intended as investments representing ownership in a company but rather as functional components facilitating system operations. The value of a utility token typically derives from the demand for the underlying service or product it enables.
Context ∞ The regulatory classification of utility tokens continues to be a central point of discussion across jurisdictions. Authorities often examine the specific use case and characteristics of a token to determine if it functions purely as a utility or if it possesses attributes of a security. This ongoing scrutiny significantly influences project development and market perception. Clarification of these regulatory boundaries remains a critical factor for the digital asset space.
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