A digital twin that incorporates blockchains to provide additional layers of trust. An example is a tokenized security that represents an underlying security or financial instruments issued on a different platform (such as a traditional CSD or registrar), where such representation itself meetings the applicable definition of a security/ financial instrument under relevant laws.

Digital twin tokens also include tokenized derivatives. A tokenized derivative is a digital twin token that represents an underlying derivative instrument issued and recorded on a different platform, where such representation itself meets the definition of a derivative as applicable under a certain code of law.

A digital twin digitally replicates a physical asset or a financial asset in the virtual environment, including its functionality, features, behavior and performance. It mirrors the actual process or function of the respective asset and keeps a full track of its historical performance. By simulating such assets to predict future performance, digital twins can enable effective decision-making and crafting of strategies to maximize security, reliability, and profitability. The digital twin stores data to determine real-time performance, which can be used and analyzed across the entire lifecycle of an asset for performance of optimization and predictive maintenance.

Digital twin tokens are, in essence, alternative digital assets, specifically tokenized alternative assets, that represent an interest in, entitlement to, or claim on, an alternative (or non-security) asset (or claim on the issuing entity for the asset, where applicable), where such representation itself satisfies the definition of such interest, entitlement, or claim under applicable laws. If certain activities are performed on a tokenized non-financial asset, the classification category may change. For example, in the case of tokenized real estate, division into smaller units may convert the alternative digital asset to a financial digital asset.

Other examples of digital twin tokens are tokenized derivatives. A tokenized derivative is a digital twin token that represents an underlying derivative instrument issued and recorded on a different platform, where such representation itself meets the definition of a derivative as applicable under a certain code of law.