Asset-backed token

An asset-backed token is a crypto token designed to represent exposure to, or a claim on, an underlying asset. The asset could be a currency, commodity, security, or other real-world time, depending on the token design and legal structure. An asset-backed token by default is not the same as owning the asset directly. In simple terms, it is a token whose value is linked to something outside the token itself and its value trades accordingly. It is important to understand what the token holder actually has a right to receive or redeem.

For example, a gold-backed token may be designed so that one token represents one gram of gold held by a custodian. Its price would generally move with the price of gold.