Payment tokens are tokens that can be used as a means of payment or as a reward for the provision of goods or services.
They represent a unit of value issued by technology or crypto companies, intended to fulfil many of the same functions as traditional currencies like the US dollar or euro. Payment tokens are also often referred to as “the purest form of cryptocurrencies”.
The use of payment tokens, as well as other types of tokens in everyday life increases constantly. This process is called tokenization.
Payment tokens possess the following key characteristics:
- interchangeability;
- lack of connection to any traditional (fiat) currency;
- electronic storage and transmission.
Examples of payment tokens include the classic and well-known cryptocurrencies Ethereum and Bitcoin (follow the link to read more about cryptocurrency).
