MARKET INFRASTRUCTURE

Token

A unit of value issued on a blockchain representing ownership, access rights, governance power, or utility within a protocol or ecosystem. Tokens include cryptocurrencies, stablecoins, governance tokens, security tokens, and tokenized RWAs.

EXAMPLE

The SEC's treatment of tokens as securities depends on how they are marketed and whether purchasers expect profit from the efforts of others, creating classification uncertainty for institutional issuers.

Relevant Roles and Functions

On-chain Role
Chief Digital Market Infrastructure Officer
Head of On-Chain Markets
Function
Digital Asset Custody Integration
Interoperability between Financial Networks
On-chain Settlement Systems
Tokenized Market Infrastructure

Related Terms

Tokenization

The process of representing ownership rights to a financial or physical asset as a digital token on a blockchain, enabling programmable transfer, fractionalization, and 24/7 settlement without traditional intermediaries.

Example

J.P. Morgan's Kinexys platform uses tokenization to enable intraday repo settlement of money market fund shares as on-chain collateral.

Cryptocurrency

A digital asset designed to function as a medium of exchange, using cryptography to secure transactions and control creation of new units. Unlike tokenized deposits or stablecoins, cryptocurrencies typically have variable market prices and are not pegged to fiat.

Example

Banks evaluating custody services distinguish between cryptocurrency holdings (volatile BTC, ETH) and stablecoin balances (USDC, USDT) given their different risk and regulatory profiles.

Governance

Decentralized system where protocol changes, upgrades, and parameter adjustments are voted on by token holders and automatically executed via smart contracts. It eliminates intermediaries, offering transparent, fast, and democratic decision-making directly on the blockchain, such as in MakerDAO.

Real-World Asset

A traditional financial or physical asset—such as a government bond, real estate, private credit facility, or trade receivable—that has been tokenized and represented on a blockchain for on-chain trading, settlement, or collateral use.

Example

BlackRock's BUIDL fund tokenizes U.S. Treasury exposure, allowing institutions to use the token as real-time on-chain collateral instead of wiring cash.