Types of tokens and how they differ
Every token answers three questions: what right it carries, whether one unit equals another, and who may hold it. The answers decide its regulation, its technical standard and what it can be used for.
What the token represents
| Token type | What it represents | Typical EU regulation |
|---|---|---|
| Equity security token | Shares in a company or SPV — ownership, votes, dividends | MiFID II, prospectus rules |
| Debt security token | A bond or note — coupon and repayment | MiFID II, prospectus rules |
| Fund unit token | A unit or share in an investment fund | UCITS or AIFMD, plus MiFID II distribution |
| E-money token (EMT) | A stablecoin referencing one official currency | MiCA, issued by banks or e-money institutions |
| Asset-referenced token (ART) | A stablecoin referencing a basket or other assets | MiCA, authorised issuers |
| Tokenized deposit | A bank deposit recorded as a token | Banking law — a deposit, not a crypto-asset |
| Utility token | Access to a good or service on a network | MiCA, if offered to the public |
| Non-fungible token (NFT) | A unique item — artwork, title or certificate | Often outside MiCA if truly unique; can be a security if it behaves like one |
Classification depends on the facts of each token and must be confirmed by legal counsel.
Is one unit the same as another?
The technical standards behind them
Standards are shared rulebooks that let wallets, custodians and venues handle tokens in the same way. These are the ones that matter most for real-world assets on Ethereum-compatible networks.
| Standard | What it does | Used for |
|---|---|---|
| ERC-20 | Basic fungible token: balances and transfers | Stablecoins, utility tokens, base layer for others |
| ERC-3643 | Permissioned token linked to verified identities; transfers only to eligible holders | Security tokens, fund units, tokenized debt |
| ERC-1400 | Security token family with partitions (classes), documents and controller operations | Security tokens with complex share classes |
| ERC-4626 | Tokenized vault: deposits, withdrawals and share value | Yield-bearing and fund-like products |
| ERC-721 | Non-fungible token: one unique item per token | Art, collectibles, titles, whole loans |
| ERC-1155 | Many token classes in one contract | Series, tranches, editions |
More distinctions that matter
Token types, answered
What is the difference between a security token and a utility token?
A security token carries investment rights — ownership, interest or a share of profits — and is regulated as a security. A utility token gives access to a product or service and falls under crypto-asset rules such as MiCA.
Is a stablecoin a security?
Usually not. In the EU, stablecoins are e-money tokens or asset-referenced tokens under MiCA; in the US, payment stablecoins have their own federal framework under the GENIUS Act of 2025.
What is ERC-3643?
An open token standard for permissioned tokens. It links tokens to verified identities and checks eligibility on every transfer, which is why it is widely used for security tokens and tokenized funds.
Can an NFT be a security?
Yes, if it behaves like an investment — for example, fractional NFTs sold with an expectation of profit. Truly unique collectibles are generally treated differently.