Payment Token

A payment token, sometimes called an exchange token, is a crypto token intended to be used mainly as a means of payment or exchange rather than to give access to a service or represent an investment. It is one of three categories, alongside utility tokens and asset or security tokens, that several regulators use to decide which rules apply to a given asset. Payment tokens generally fall under anti-money-laundering law rather than securities law, so exchanges and custodians handling them must run identity checks and report suspicious activity. Bitcoin and many stablecoins are commonly described this way. Because the category depends on function, a token can shift classification if its real use and marketing change over time.