Unlike a blockchain’s native currency (like Bitcoin on the Bitcoin blockchain or Ether on Ethereum), a token is created using that blockchain’s existing infrastructure — commonly via a standard like ERC-20 for fungible tokens or ERC-721 for unique ones. This is why so many crypto projects can launch quickly: they don’t need to build and secure their own blockchain, just deploy a token contract on one that already exists. Tokens are generally grouped into rough categories — utility tokens (grant access to a product or service), governance tokens (grant voting rights over a protocol), and security-like tokens (represent an ownership or profit-sharing claim, which triggers securities law in most jurisdictions).

The nuance founders most often miss is that calling something a “utility token” doesn’t automatically exempt it from securities regulation — regulators generally look at the economic substance of the offering, not the label the project chose. A token sold to the public with an expectation of profit from the efforts of a promoter can be treated as a security-like offering regardless of what it’s called in the whitepaper.

🇵🇭 Philippine Example

The Philippine SEC's Memorandum Circular No. 4, Series of 2025 formalized rules for Crypto-Asset Service Providers, requiring anyone offering a crypto-asset (including tokens) to Filipinos to file a public disclosure document with the SEC at least 30 days before marketing or sale, and requiring platforms serving Filipino users to be registered as a Philippine corporation with a minimum paid-up capital of ₱100 million. This puts real regulatory weight behind what used to be an unregulated token-listing free-for-all.

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