In the last few years, as the number of cryptocurrency use-cases increased, regulation surrounding the classification of digital tokens has also changed significantly.
Because Värdex operates in Switzerland, the classification of cryptocurrency is based on FINMA regulation.
Digital tokens can be categorised into 3 distinct groups:
- Payment token: A token that is used exclusively to make a purchase online for goods and services. This is synonymous with using a debit card for daily transactions, however, the major difference is that you are making payment directly to the supplier, without using a bank as an intermediary.
- Utility tokens: provide users with an online product or service. An example might be a digital CRM solution, which, instead of requiring monthly payments via cash, requires users to hold a specific quantity of digital currency.
- Asset tokens: These tokens represent real-life assets, such as dividends, equity, currency and other investment instruments. An asset token can make it easier and more secure for owners to transfer ownership.