Security tokens are digital representations of regulated financial instruments. They can represent equity shares in a company (giving holders voting rights and dividend entitlements), corporate or government bonds (representing debt obligations with fixed interest payments), trade receivables and invoices (allowing businesses to tokenize outstanding payments for liquidity), and units in investment funds. Security tokens are subject to securities regulations in their respective jurisdictions, which means issuers must comply with requirements around investor accreditation, disclosure, and reporting. The partitioned structure allows tokens to be divided into tranches with different rights or restrictions, enabling sophisticated financial products like tiered debt or preferred shares.