Asset-backed Token (ABT)

Similar to a stablecoin, an ABT is a cryptographic asset pegged to another underlying asset (reserve) to maintain a stable value. The underlying assets can be diverse and may include real estate properties, precious metals like gold or silver, commodities, or even artworks. Essentially, any valuable asset that can be represented digitally and divided into smaller units can be tokenized.

Asset-backed tokens may be subject to regulatory oversight, especially if they represent ownership in assets with legal and regulatory requirements, such as real estate. Compliance with securities regulations and other relevant laws is an important consideration in the issuance and trading of these tokens.

It is important to note that under MiCA’s framework, asset-backed tokens (ABT) will have no legal meaning in the EU as it falls under a different framework.