Asset-Backed Tokens

Asset-Backed Tokens

Asset-backed tokens, also known as tokenized securities, are digital representations of real-world assets. Gold, crude oil and other kinds of physical assets can be represented digitally by an asset backed token - a digital claim on that physical asset. These tokens allow investors to invest in the value of these commodities without having to buy and store them themselves.

Asset-backed tokens are a development made possible by blockchain technology. Bitcoin, of course, was the original token, and it doesn't back any physical assets. Together, Bitcoin and the crypto-economy have been through a lot.The number of different crypto-currencies available is at an all-time high, from newer digital ones to stablecoins pegged to fiat currency. One of the main reasons for the cryptocurrency's volatility is the reliance on financial institutions. More specifically, this means that cryptocurrencies rely on banks and other entities to exchange them between peers.


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