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Glossary

Custody

Who legally holds the underlying asset that backs a token. Custody arrangements determine counterparty risk and redemption rights.

Custody answers a simple but critical question: who actually holds the asset behind your token? For a tokenized stock, that is the custodian safeguarding the real share that backs the token.

The quality of the custody arrangement determines your counterparty risk and whether you can redeem. A token is only as sound as the custody and backing standing behind it.

Related terms

Tokenized stockA blockchain token representing a claim on a real share held by a custodian. The holder owns the token, not the underlying equity directly.
RWA (Real-World Asset)An off-chain asset — such as a treasury bill or equity — represented on-chain as a token issued by a regulated entity.