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3. Regulating Digital Assets: Digital Asset Categorizations

It is worth noting that to understand digital token categorisation,

it is important for regulators and all stakeholders to implement laws and/or

regulations for such digital assets. This is also because digital asset can be

categorised into a variety of types, hence the differences that may fall within
the scope of different laws and/or regulations. More precisely, a tokenûs legal

treatment may depend on its main function or the type of token being

considered. The tokensû categorizations are helpful for capturing the

complexities of cryptoassets and in informing regulatory responses in this

rapidly evolving domain.

More specifically, digital tokens and cryptocurrencies can be

considered types of digital assets. The types of digital assets primarily depend

on the assetsû functions and features. This can be explained by reference to

the functions and features of traditional financial instruments or financial

assets, such as securities. For example, the security characteristics of security
(digital) tokens shall be considered in order to properly assess the security of

such tokens. However, there are other types of tokens, including payment and

utility tokens, which may fall within the scope of different regulatory

frameworks. It is worth pointing out that this article only focusses on the

regulatory framework for payment tokens. As çLibra coiné was initially

proposed as ça simple global currency...é, it is obvious that the coin is aimed

to be used as a means of payment. To this extent, the latter part of this article

will mainly illuminate information on payment tokens, including cryptocurrencies

and stablecoins, in order to provide a basic framework for the legal and
regulatory analysis.

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