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(6)
this fast-growing area. It is worth noting that these terms are broader than

some others, such as virtual currency, cryptocurrency and/or digital assets,
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which may be limited to payment or exchange tokens.

According to ING, digital tokens are ç...designed to work as a medium

of exchange within a limited ecosystem and to offer additional features, such

as representing the right to access product or service or ownership of assets
(8)
(e.g., shares, bonds)é.

1.2 The Utilization of Digital Assets

Digital assets can be used in a variety of ways. To be more specific,

this depends on their main intended function or the type of token being

considered. For example, digital assets can be used as financial instruments

for businesses in the form of alternative fundraising channels. With regard to

the fundraising mechanisms of digital assets, there is a so-called çasset
tokenisationé process that is worth mentioning. More specifically, asset

tokenization is a process relating to digital assets, as it refers to the process

of turning rights in relation to a real-world asset into a digital representation.
The digital representation in this context takes the form of a digital token. The

benefits of such a creation include providing greater liquidity to an asset

owner, offering fractional ownership, reducing transaction costs and being an

(6)
Guidance on Cryptoassets: Feedback and Final Guidance to CP 19/3, Financial Conduct
Authority (FCA), <https://www.fca.org.uk/publication/policy/ps19-22.pdf> accessed 1
December, 2019.
(7)
Supra, note 1.
(8)
Cryptocurrencies and Tokens, European Central Bank, <https://www.ecb.europa.eu/paym/
groups/pdf/fxcg/2018/20180906/Item_2a_-_Cryptocurrencies_and_tokens.pdf> accessed 1
December, 2019.

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