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Tokenization Explained: What it Is, How it Works and How You Can Benefit

Tokenization can be defined as the replacement of a high-value credential with a surrogate number that can only be used within a particular context. Since this definition is quite broad, the word ‘token’ can mean many things to many people. In the context of this whitepaper, the high-value credential is the PAN. Even within this context, it is necessary to properly distinguish between two types of tokens: security tokens and payment tokens. The key difference between these token types is that payment token can be used to initiate a payment transaction, whereas security token cannot.

 

Cleo Turner
Cleo is DFI's CDFP coach and helps our students with the apply section of the Certified Digital Finance Practitioner (CDFP) program. As part of her role Cleo shares useful resources and insights from a wide variety of sources and authors with our community.

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