Security Tokens are digital securities or digital financial assets that represent the value of tradable assets (securities) such as real estate or gold. These tokens are created by the tokenization of physical assets. Cryptocurrencies must pass the Howey test in order to be considered a Security Token. A Security Token Offering or STO refers to the process of trading Security Tokens in exchange for funds from investors for a new project or company. Security Tokens must be compliant with federal regulations of specific regions. Owing to the liquidity and features of security tokens, more blockchain startups are now choosing STO to build investors’ trust in their projects. The relative success of bitcoin proves that money first and foremost depends on trust. Neither gold nor bonds are needed to back up a currency.
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