Accounting Token

Accounting tokens are tokenized credit or debit entries (IOU/UOM), exactly like any accounting system that uses a spreadsheet. They serve merely as a representation of the amount due by the token holder for accounting reasons. It cannot be regarded as a financial instrument, unlike stablecoins, as it is not backed by FIAT.

With a small number of settlement partners, the system with accounting tokens performs effectively. In fact, if the number is small enough, the entire transaction may be handled utilizing the token’s smart contract and the blockchain. Similar to an old-fashioned coupon, these accounting tokens don’t just have to represent money; they may also represent commodities or services that are equivalent to the amount of the recorded value. They function practically in the same way as coupons.