What is the difference between cryptocurrencies and security tokens?

Both cryptocurrencies and security tokens use blockchain technology. Cryptocurrencies are digital representations of value that can function as a medium of exchange, a unit of account, or a store of value. This is similar to the way gold and fiat currencies such as USD and the Euro are used. Security tokens (also commonly known as security tokens) are considered securities, not currencies, and therefore require registration with the SEC under the U.S. Securities Act.

Security tokens ownership functions in a similar fashion to traditional securities, such as stocks and bonds. The owner of a security token has the opportunity to benefit from the performance of the underlying issuer in the form of dividends, interest payments or capital appreciation, depending on the structure of the security token.