Utility Token

What Is a Utility Token? 

Utility tokens are tokens that are expressly designed to assist people in using something. The usage of utility tokens is restricted to the environment in which the utility token was built. For instance, a car service might one day have its own utility token that consumers can use to pay for rides on the car service network. Utility tokens are not intended to be used as investment vehicles. 

The Securities and Exchange Commission (SEC) is continually on the lookout for innovative utility tokens as well as security tokens. The Howey Test is used by the regulator to assess whether a specific token is a security token or even a utility token. Utility tokens are not bound to the exact restrictions and criteria as security tokens because they are not regarded as investment contracts.