# What are Cryptoassets?

![](/files/jtnZ2jSULZf3TU8eVDBf)

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HMRC [defines cryptoassets](https://www.gov.uk/government/publications/tax-on-cryptoassets) as “cryptographically secured digital representations of value or contractual rights” that have the potential to be transferred, stored and traded electronically.
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HMRC do not consider cryptoassets such as Bitcoin and Ethereum to be currency or money. The government’s [Cryptoasset Taskforce (CATF)](https://www.gov.uk/government/publications/cryptoassets-taskforce) identifies three types of cryptoassets: exchange tokens, utility tokens and security tokens.

* **Exchange tokens** – these are intended to be used as a method of payment and include cryptocurrencies like Bitcoin and Litecoin. They do not provide any rights or access to goods or services.
* **Utility tokens** - these provide the holder with access to particular goods or services on a platform usually using Distributed Ledger Technology (DLT).
* **Security tokens** - these may provide the holder with particular interests in a business, including debt due by the business or a share of profits in the business.

We will not go into more detail about the different types of cryptoassets, as their treatment for taxation purposes is based on the “[nature and use of the token and not the definition of the token](https://www.gov.uk/government/publications/tax-on-cryptoassets)”.


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