Utility VS Equity Tokens : What’s the Difference?



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    EQUITY TOKENS

    Equity tokens are essentially security tokens that represent ownership of an asset, either in stock or in debt. Blockchain and smart contracts enable startups to circumvent the IPO route and issue shares over blockchain. This would also mean that lenders can create tokens representing the debt owned by a company, and this enables the loans to be bought by investors, enhancing the liquidity of the company, or any asset for that matter.

    A lot of investors believe that equity tokens, with the advantages of the blockchain and smart contracts, can become the mainstream ICO token, but the SEC of the United States signals otherwise. The equity tokens should be subject to federal regulations, and this condition means not all startups, but only the companies that have established compliance with all the regulatory requirements can issue equity tokens. Investors should use their diligence in choosing the right and compliant startups for contributing to an equity token.....Read More