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Crypto Terms:  Letter T
Jun 19, 2023 |
updated Apr 08, 2024

What are Tokenized Securities?

Tokenized Securities Meaning:
Tokenized Securities - assets whose ownership rights have been converted into tokens.
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Let's find out Tokenized Securities meaning, definition in crypto, what are Tokenized Securities, and all other detailed facts.

Tokenized securities are assets like equities, bonds, or investment funds whose ownership rights have been converted into a token that is registered on the blockchain infrastructure. They function as tradable assets that represent investments in other assets on the blockchain.

Securities are different types of negotiable financial assets that hold some kind of value. Some of the security types are:

  • Equity – investments in stocks that are issued by other companies;
  • Debt – borrowed money that needs to be repaid to the lender;
  • Investment funds – capital pools gathered by investors. They are used for collective purchases of securities.

Tokenized securities can also be used to represent the ownership of liquid assets like real estate. Owners can use these tokens for trading. Tokens proving the ownership of securities can be traded on the blockchain network, ensuring that all trading and ownership records are logged in immutable blocks.

The use of blockchain technology eliminates the need for third-party involvement as the transaction records are stored in the distributed ledger. The blockchain ledger is maintained via complex algorithms and consensus mechanisms that ensure the validity of the records and verify the ownership of the assets.

Ownership tokens can be created via security token offerings. They require the backing of tangible securities.