# What Is the Difference between a Utility Token and a Security Token in Cryptocurrency? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

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## What Is the Difference between a Utility Token and a Security Token in Cryptocurrency?

A utility token grants access to a product or service on a blockchain network, like paying for gas or a platform feature. A security token represents ownership in an underlying asset, such as equity or a share of profits, making it subject to financial regulations like a traditional security.

- [What Is the Legal Distinction between a “Utility Token” and a “Security Token” in the US?](https://learn.greeks.live/path/what-is-the-legal-distinction-between-a-utility-token-and-a-security-token-in-the-us/)

- [How Is a Utility Token Different from a Security Token?](https://learn.greeks.live/path/how-is-a-utility-token-different-from-a-security-token/)

- [What Is the Difference between a Security Token and a Utility Token?](https://learn.greeks.live/path/what-is-the-difference-between-a-security-token-and-a-utility-token/)

- [What Is the Primary Function of a Utility Token versus a Security Token?](https://learn.greeks.live/path/what-is-the-primary-function-of-a-utility-token-versus-a-security-token/)

- [What Is the Difference between Utility Tokens and Security Tokens from a Regulatory Perspective?](https://learn.greeks.live/path/what-is-the-difference-between-utility-tokens-and-security-tokens-from-a-regulatory-perspective/)

- [What Is the ‘Howey Test’ and How Is It Applied to Cryptocurrencies?](https://learn.greeks.live/path/what-is-the-howey-test-and-how-is-it-applied-to-cryptocurrencies/)

- [How Do Utility Tokens Differ from Security Tokens in the Context of Regulatory Compliance?](https://learn.greeks.live/path/how-do-utility-tokens-differ-from-security-tokens-in-the-context-of-regulatory-compliance/)

- [What Is the Primary Difference between a Utility Token and a Security Token?](https://learn.greeks.live/path/what-is-the-primary-difference-between-a-utility-token-and-a-security-token/)

## Glossar

### [Security Token](https://learn.greeks.live/area/security-token/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Token ⎊ A security token represents ownership or rights to an underlying asset, leveraging blockchain technology to facilitate fractionalization, enhanced liquidity, and programmable compliance.

### [Utility Token](https://learn.greeks.live/area/utility-token/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Network Access ⎊ Utility Token represents a digital asset designed primarily to grant holders access to a specific product or service within a decentralized network, rather than representing a claim on future profits or ownership equity.

## Discover More

### [What Is the Difference between a Token Burn and a Token Lock-Up?](https://learn.greeks.live/path/what-is-the-difference-between-a-token-burn-and-a-token-lock-up/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a Token Burn and a Token Lock-Up?](https://learn.greeks.live/wp-content/uploads/2025/10/Crystallized-Geometric-Structures-Illustrating-Complex-Financial-Derivative-Payoff-Profiles-on-Blockchain-Ledgers.webp)

Burn is permanent removal from total supply; lock-up is temporary restriction on circulating supply.

### [What Is the Primary Difference between a Security Token and a Tokenized Stock?](https://learn.greeks.live/path/what-is-the-primary-difference-between-a-security-token-and-a-tokenized-stock/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Primary Difference between a Security Token and a Tokenized Stock?](https://learn.greeks.live/wp-content/uploads/2025/10/Metallic-Finishes-Representing-Layered-Structured-Collateral-in-Decentralized-Finance-Protocols.webp)

Tokenized stock is a derivative representing a traditional share; a security token is the broader legal classification.

### [Can a Utility Token Evolve into a Security Token over Time?](https://learn.greeks.live/path/can-a-utility-token-evolve-into-a-security-token-over-time/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Utility Token Evolve into a Security Token over Time?](https://learn.greeks.live/wp-content/uploads/2025/10/Hyperspeed-Digital-Asset-Propulsion-System-Modeling-Complex-Option-Hedging-Vector-Flux.webp)

Yes, if the network fails to decentralize or the token's primary value shifts to a speculative investment.

### [What Is the Concept of 'Diminishing Marginal Utility' in the Context of Network Growth?](https://learn.greeks.live/path/what-is-the-concept-of-diminishing-marginal-utility-in-the-context-of-network-growth/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Concept of 'Diminishing Marginal Utility' in the Context of Network Growth?](https://learn.greeks.live/wp-content/uploads/2025/10/Metallic-Trunk-Latch-Mechanism-Reflecting-Digital-Asset-Volatility-Under-Dark-Pool-Illumination.webp)

Each new user adds less utility than the last one, causing the network effect's rate of growth to slow down.

### [What Is the Regulatory Difference between a Futures Contract on a Security and a Futures Contract on a Commodity?](https://learn.greeks.live/path/what-is-the-regulatory-difference-between-a-futures-contract-on-a-security-and-a-futures-contract-on-a-commodity/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Regulatory Difference between a Futures Contract on a Security and a Futures Contract on a Commodity?](https://learn.greeks.live/wp-content/uploads/2025/10/Analyzing-Hardware-Security-Module-Interfacing-with-Liquidity-Pool-Mechanisms-for-Decentralized-Finance-Governance.webp)

Security futures are jointly regulated by SEC/CFTC; commodity futures are regulated solely by the CFTC, affecting compliance and rules.

### [What Is a Token "Utility" and How Does It Drive Demand?](https://learn.greeks.live/path/what-is-a-token-utility-and-how-does-it-drive-demand/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Token "Utility" and How Does It Drive Demand?](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptualization-of-Decentralized-Autonomous-Organization-Governance-Token-Ring-Structures-Intersecting-with-Exotic-Options-Payoff-Diagrams.webp)

The specific function of a token (e.g. payment, governance) that drives demand for platform access.

### [What Is the Difference between a Stablecoin and a Volatile Payment Token in Terms of Utility?](https://learn.greeks.live/path/what-is-the-difference-between-a-stablecoin-and-a-volatile-payment-token-in-terms-of-utility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a Stablecoin and a Volatile Payment Token in Terms of Utility?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetry-in-Blockchain-Asset-Hedging-Symmetric-Pairwise-Futures-Contract-Execution-Visualized.webp)

Stablecoins offer price stability for reliable exchange; volatile tokens offer exchange utility but carry price risk/reward, often for network fees.

### [How Does the 'Velocity' of a Token Relate to Its Utility versus Its Speculative Nature?](https://learn.greeks.live/path/how-does-the-velocity-of-a-token-relate-to-its-utility-versus-its-speculative-nature/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the 'Velocity' of a Token Relate to Its Utility versus Its Speculative Nature?](https://learn.greeks.live/wp-content/uploads/2025/10/Microscopic-Analysis-of-Cryptographic-Key-Extraction-Through-Differential-Exchange-Mechanism.webp)

High velocity means frequent exchange (utility); low velocity means holding (speculation). High utility should correlate with high velocity.

### [What Is the Difference between a Private Key and a Seed Phrase in Cryptocurrency?](https://learn.greeks.live/path/what-is-the-difference-between-a-private-key-and-a-seed-phrase-in-cryptocurrency/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a Private Key and a Seed Phrase in Cryptocurrency?](https://learn.greeks.live/wp-content/uploads/2025/10/Metalloid-Stylus-Interfacing-with-Exposed-Quantum-Ledger-Infrastructure-Beyond-Bi-Metallic-Casing-Edges.webp)

Private key spends from one address; seed phrase generates all keys and is the ultimate wallet backup.

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