What are Crypto Assets

We are all used to our money and valuables being stored in banks or government registries. But in recent years, a new type of asset has emerged that exists only on the Internet and is managed differently—independently and transparently. These are crypto assets.

To understand what they are, you need to abandon the idea that there must be a central authority (bank or government) that confirms your ownership. In the world of crypto assets, your ownership is confirmed by mathematics and code.

Our article will help you understand these complex concepts in simple terms.

Definition of an Asset

A digital asset is simply any data in digital form that has value (for example, a purchased movie, e-book, or music file). Your ownership of such a file is always confirmed by some company (for example, a streaming platform server or a license agreement).

A cryptocurrency is a digital asset (digital money, object, or right) whose ownership is protected by special encryption and recorded in a shared ledger (blockchain) that is independent of banks and governments. This ensures that transactions are always transparent, secure, and cannot be reversed. The most famous and first crypto asset is Bitcoin, but there are also altcoins, NFTs and many others. They all offer different conditions and provide different opportunities.

Types of Digital Assets

Crypto assets

Crypto assets are the foundation of the entire digital economy. Essentially, it is any digital store of value or medium of exchange (currency) that is created, securely stored, and transferred in a decentralized ledger — a blockchain. This broad category includes everything from the most popular cryptocurrencies (such as Bitcoin) to specialized digital tokens.

Stablecoins

Stablecoins are a special type of crypto asset designed to maintain a stable, unchanging value. Their price is most often tied to a fiat currency, such as the US dollar. Stablecoins serve as a critical tool for settlements and the secure transfer of value in the crypto economy, as they avoid the volatility of traditional cryptocurrencies.

Central Bank Digital Currencies (CBDCs)

A CBDC (Central Bank Digital Currency) is a digital currency issued and controlled by a country's central bank. Unlike decentralized crypto assets (such as Bitcoin), a CBDC is not a cryptocurrency. It is a new, digital form of traditional national currency. It is issued by the state and centrally managed, allowing the central bank to retain full control over monetary policy while leveraging the benefits of distributed ledger technology (DLT) to improve payment efficiency.

Security tokens

These tokens are not created to give you access to a service but for investment purposes. Their main feature is that they are linked to a real company or enterprise, and owning a token means that you have a stake in that company. Essentially, security tokens are tokenized stocks or bonds.

Governance tokens

These tokens give their owners a say in the development of the platform or protocol. They allow token holders to vote on important changes, such as how to spend the budget or what new features to add. This shows that Internet users want not only to use the service but also to have real power and a stake in its management.

Non-fungible Tokens (NFTs)

Non-fungible tokens (NFTs) are unique digital certificates recorded on the blockchain. They serve as proof that you own a unique digital (or even physical) item. NFTs are used as digital art (unique images that cannot be copied), items in video games, intellectual property rights. Even major brands such as Gucci and Louis Vuitton use NFTs for their digital collections.

How Crypto Assets Are Regulated?

Since crypto assets know no borders, governments around the world have to figure out how to classify and control them. There is no single global approach yet. Below we will look at regulations in certain areas.

USA

In the United States, the rules for crypto assets are largely based on a very old 1946 court ruling — the Howey Test. This test determines that all digital assets fall into three categories: digital asset (a general term), security, which is strictly regulated by the SEC, and commodity, which is regulated by the Commodity Futures Trading Commission (CFTC). Major assets such as Bitcoin and Ethereum are considered commodities rather than securities. Moreover, according to the head of the CFTC, 70% to 80% of all crypto assets are not securities. This statistical fact shows that the vast majority of the market is under the CFTC's jurisdiction.

The problem is that applying a 1946 law to 21st-century technology is very difficult and not always clear. Many new crypto projects, where the development team is actively working on development, may be recognized by the SEC as investment contracts.

So, In the US, two main bodies are responsible for regulation: the SEC (for assets similar to stocks) and the CFTC (for assets similar to commodities). They are in constant joint negotiations to finally clarify these rules.

Europe

The European Union took a completely different path: it created a new, special law — the MiCA (Markets in Crypto-Assets Regulation) Regulation. MiCA came into force in June 2023 and establishes uniform rules for crypto assets in all 27 EU countries.

MiCA regulates only those crypto assets for which no other financial laws exist. They are divided into three main groups:

1. Electronic money tokens (EMT): digital equivalents of conventional electronic money.

2. Asset-backed tokens (ABT): stable tokens backed not only by a single currency but also by other assets (e.g., bonds).

3. Other crypto assets: all other assets, including BTC, altcoins, utility tokens and some NFTs.

For those who issue or trade crypto assets (especially ABT and EMT), MiCA requires strict transparency, mandatory publication of all information (“white papers”), and obtaining special operating permits (licenses). At the same time, the adoption of MiCA gives Europe a big advantage, as companies prefer to operate where the rules are clear and the same for all countries.

India

India has historically been very strict on cryptocurrencies and even considered banning them altogether. But today, India's approach is as follows: it has effectively allowed trading in crypto assets but has imposed high taxes on profits. This has made speculative trading very difficult.

At the same time, the Reserve Bank of India (RBI) is actively creating its own government-issued digital currency (CBDC). This shows that India wants to use blockchain technology to improve payments but at the same time maintain tight control over money while remaining skeptical of decentralized private assets.

The Impact and Prospects of Crypto Assets

Crypto assets offer enormous practical benefits, especially for ordinary people. They provide fast speeds and low fees compared to cumbersome international bank transfers. But most importantly, they provide financial access to millions of people who, for various reasons, cannot use traditional banking services. In regions with unstable economies or weak banks, crypto assets are becoming the only way to send and receive money quickly and securely, without being subject to local restrictions.

Crypto assets are already being actively integrated into the traditional financial system. Regulation helps to create secure bridges between these worlds. Soon, digital assets are going to be treated on a par with traditional securities — as an equal and regulated asset class.

The potential of decentralized, fast, and transparent systems such as blockchain is enormous. It is possible that these systems could completely replace the traditional financial infrastructure. Understanding that crypto assets are an independent ownership technology protected by mathematics is critical to navigating the future of finance. We are on the cusp of massive change, and your awareness is your greatest asset.

We hope our article has helped you learn and understand what digital assets are. If you still have questions, feel free to ask them in the comments.