World Bank2025-01-072025-01-072025-01-07https://hdl.handle.net/10986/42628Security token offerings (STOs) recently have gained attention as an alternative mechanism for funding. By leveraging blockchain technology, STOs facilitate the issuance of tokens that are backed by tangible assets and adhere to regulatory frameworks, presenting a more secure and regulated option than that provided by initial coin offerings (ICOs), which often operate in ambiguous legal environments. This enhanced security and regulatory compliance ensures greater investor protection and transparency. The growing adoption of STOs is driven by their potential to democratize access to capital markets and improve liquidity for assets that have traditionally been illiquid. This innovative financial instrument has the potential to affect developing countries by providing an inclusive and efficient means of gaining access to capital. Although STOs are a relatively new market and are still in the early stages of development, presenting inherent risks and challenges for future development, they show promise in the entrepreneurial finance landscape. Recognizing the rapid development and potential of STOs to introduce new methods of capital aggregation and to drive industry innovation, this primer aims to clarify the definition of STOs, outline their benefits and risks, and capture regulatory approaches and lessons from global case studies.en-USCC BY-NC 3.0 IGOECONOMIC GROWTHSECURITY TOKEN OFFERINGSACCESS TO CAPITAL MARKETSASSET LIQUIDITYWorking PaperWorld Bank10.1596/42628