CryptoAssets

Cryptoassets are digital representations of value that rely on cryptography and distributed ledger technology. They are typically issued on blockchain networks and can operate without central banks or central authorities. The term is used to describe a broad class of assets that includes cryptocurrencies as well as tokens that represent other assets or rights.

Categories include payment tokens (cryptocurrencies designed mainly as means of exchange), utility tokens (which provide access to a product or service within a blockchain ecosystem), and asset-backed or tokenized assets (security tokens or real-world assets such as equity, debt, real estate, or commodities represented on-chain). Stablecoins, which aim to maintain a stable value relative to a fiat currency or basket of assets, are another common group. Governance tokens confer rights to participate in protocol governance.

Most cryptoassets rely on distributed ledgers and cryptographic security. Many operate on public, permissionless blockchains with smart-contract functionality; others run on private or consortium networks. Ownership is typically recorded as a digital wallet address, and transfers occur via peer-to-peer transactions or smart-contract interactions.

Regulation varies by jurisdiction. Some cryptoassets are treated as currencies, others as commodities or securities. Regulatory regimes may cover issuance, trading, custody, and disclosure. Investor protection, anti-money-laundering requirements, and consumer protection rules influence market behavior and access.

Use cases include cross-border payments, remittances, decentralized finance, tokenization of illiquid assets, and fundraising activities. Risks include price volatility, custody and security risks, fraud, market manipulation, and evolving legal frameworks.

See also: blockchain, tokenization, cryptocurrency, stablecoin, security token offering.