3 ms·
A commodity doesn't promise a return for holding it, a security does. If I buy a gold bar, in a year I have a gold bar, same with a bushel of wheat, or 1millio
by sgent 4y ago
A commodity doesn't promise a return for holding it, a security does. If I buy a gold bar, in a year I have a gold bar, same with a bushel of wheat, or 1million yen.
Securities use resources to try and generate a return -- companies try to sell a product, bonds generate interest, etc.
- Galanwe 4y agoThis is actually the only answer that is pertinent in this context, it should be up voted. Securities generate returns, commodities do not. The regulation proposals for tokens include a number of different categories: utilities (governance), securities (returns), commodities (holding), etc. The categorization of tokens influence the amount of regulation they have to undergo: Exchanges, KYC, AML, etc. For instance if a token is categorized as a security, then it is an investment product. You will need a SEC licence to sell it, perform KYC & AML on clients, have audits, etc.