Asset-referenced tokens are crypto assets of non-governmental origin whose performance is linked to legal tender (e.g. US dollar or euro) or other assets (such as gold, securities, other crypto assets or any combination of these). The idea is that a stable relationship is established between the token and the reference asset, and a wide variety of processes are used to try to achieve this. These can include, for example, a reserve being held on the blockchain (on-chain) or apart from the blockchain (off-chain) or the use of algorithmic processes. For this reason, asset-referenced tokens are supposed to be more stable than other crypto assets. In contrast to security tokens (see below), however, the underlying assets or associated rights are not necessarily embodied in the token. Stablecoins sometimes show dramatic differences in terms of their legal, technical, functional and economic design. What these private crypto assets all have in common is the fact that their price stability cannot be equated with the stability of the assets referenced, particularly not with that of state currencies.

Outlook: European regulation

The draft of a regulation of the European Union (EU) for crypto assets and related business activities (Markets in Crypto-Assets Regulation – MiCA) differentiates between two sub-types of tokens linked to a reference value: electronic money tokens (e-money tokens – EMTs), which reference a single currency, and asset-referenced tokens (ARTs), which reference other assets (including crypto assets and currencies) or combinations thereof.

Additional information on MiCA, including EMTs and ARTs, can be found in a separate overview.