In recent times, blockchain has been one of the fastest growing technologies in IT history, and it’s game changing decentralized model has been widely adopted by diverse industries. A major part of its popularity is due to cryptocurrency. Earlier it used to depict fiat money alternatives, such as Bitcoin, Litecoin, and so on. Now it means any coin that can be transferred through blockchain. The emergence of ICOs lead to an abundance of cryptocurrencies in the market, which basically represented the promise of access to a product or service in the future without any backing of a tangible asset.

To add much needed credibility and a layer of federal security regulation, security tokens are now being used. These tokens are backed by an external, tangible asset, unlike utility tokens used in ICOs. For example,  a security token can represent a share in a publicly traded company. So, if the company performs well, the share value will increase and so will the value of the security token. Security tokens are properly governed by federal regulations, hence increases investor confidence and credibility.