Crypto assets are digital assets that use public ledgers over the internet to prove ownership. They are created or minted when new information is added to a particular blockchain, and users can exchange existing digital assets and/or create new ones. Digital assets can be placed in five categories, including any digital store of value or medium of exchange (currency) that’s stored on the blockchain. Some of the more common types of crypto assets include cryptocurrency, utility tokens, security tokens, and non-fungible tokens.

Cryptocurrency is a digital currency or medium of exchange that can be used for various purposes, such as buying goods and services or investing. It is likely the most well-known type of crypto asset.

Crypto assets can be used as a means of payment and can present opportunities in terms of cheaper, faster, and more efficient payments, in particular on a cross-border basis, by limiting intermediaries. They can also be used as a means of payments of insurance premiums or claims compensation in some jurisdictions.

However, there are many risk-related challenges facing organizations as they institutionalize crypto assets. Technology and platforms used for crypto assets, such as online wallet companies and exchanges, are susceptible to cybersecurity threats and hacking, putting deposits at risk. The regulatory framework regarding crypto assets and crypto asset trading platforms is developing, which can leave purchasers, speculators, and investors confused about when and if securities regulations apply.

In summary, crypto assets are digital assets that use public ledgers over the internet to prove ownership. They can be used for various purposes, including as a means of payment and investment. However, there are also risks associated with crypto assets, such as cybersecurity threats and regulatory uncertainty.