Equity tokens and debt tokens

When a company wants money from investors, it has two classic paths. It can sell a piece of itself, and the investor becomes a shareholder. Or it can borrow, and the investor becomes a creditor. Tokenization does not create a third path: it changes how these rights are recorded and transferred, but it does not change their nature.

That is why the first question about any token offered as an investment is: does it make me a shareholder or a creditor? This article explains the difference, the rights on each side and how Brazilian regulation treats both.

If the concept of tokenization is still new to you, start with what asset tokenization is.

Equity token: you become a shareholder

An equity token represents a fraction of a company’s capital. In its most direct form, it is the digital representation of a share. Under Brazil’s Corporations Law (Law No. 6,404/1976, art. 1), the company’s capital is divided into shares, and the shareholder’s liability is limited to their price.

What does this shareholder get? The same law, in art. 109, lists rights that not even the bylaws can take away from the shareholder, including:

• sharing in the company’s profits;
• sharing in the assets left over in case of liquidation;
• overseeing management;
• having preemptive rights to buy new shares.

There is also the mandatory dividend (art. 202): a portion of each year’s profit that must be distributed to shareholders, set in the bylaws or, if they are silent, calculated by the rule in the law.

Note the word profit. The shareholder only receives something if the company makes a profit and decides to distribute it. If there is no profit, there is no dividend. The shareholder’s gain can also come from appreciation of the stake, but that depends on someone wanting to buy it later at a higher price, which is not guaranteed.

An equity token is not always a share. In small companies, which are often limited liability companies rather than corporations, the stake may be offered through convertible contracts or other instruments that give a right to a future slice of the business.

Debt token: you become a creditor

A debt token represents a loan made to the issuer. The most classic example is the debenture. Law No. 6,404/1976 (art. 52) says that a debenture gives its holder a “credit right” against the company, under the terms of the indenture. Debentures in token form are the subject of debenture tokenization.

The creditor does not depend on profit. They are entitled to what was agreed: interest (fixed, linked to an index or mixed) and repayment of the amount lent on set dates. If the company makes a lot of profit, the creditor still receives only what was agreed. If the company makes little profit, it still has to pay.

The debt may have collateral. Art. 58 of the same law provides for debentures with secured collateral (a specific asset tied to payment), with a floating charge (a general privilege over the company’s assets), without preference, or subordinated to other creditors. The weaker the collateral, the greater the risk.

This family also includes receivables-backed tokens, in which payments to the investor come from the flow of credits the company is due to receive. That structure is in receivables tokenization.

The difference that shows up when the company fails

The distinction between shareholder and creditor becomes clearest in the worst-case scenario.

In bankruptcy, Law No. 11,101/2005 (art. 83) defines an order of payment for creditors: labor claims (up to a limit), secured claims (up to the value of the asset), tax claims and so on, down to unsecured claims, which have neither collateral nor privilege, and subordinated claims. Only after all creditors have been paid, says art. 153, does any remaining balance go back to the company, and from there to the shareholders.

In practice, this means:

• the secured creditor has the best position among investors;
• the unsecured creditor joins a long queue and may receive only part;
• the shareholder is at the end, and in a typical bankruptcy receives nothing.

Holding a token does not change this queue. What defines the position is the legal right behind it, not the technology.

Side-by-side comparison

	Equity token	Debt token
You are	a shareholder	a creditor
You receive	part of the distributed profit and any appreciation	interest and repayment of principal, as agreed
Guaranteed payment?	no	it is an obligation of the issuer, but depends on its ability to pay
Term	indefinite	set in the instrument
Say in management	may have voting and oversight rights	as a rule, no; has rights under the indenture and the creditors’ meeting
In bankruptcy	paid last, if anything is left	paid before the shareholder, according to the class of claim
Main risk	the business makes no profit and the stake is worth nothing	the issuer does not pay (default)

There are also hybrid formats, such as debt convertible into equity. They start as a loan and may become equity upon certain events. In these cases, the risk changes over the life of the instrument, and the offering document needs to explain when and how that happens.

What the CVM says about both

CVM Guidance Opinion No. 40 (the CVM is Brazil’s securities regulator) states that a crypto-asset is a security when it is the digital representation of any of the securities listed in Law No. 6,385/1976 (art. 2), such as shares, debentures and commercial notes, or when it qualifies as a collective investment contract. The opinion notes that, in market practice, tokens have represented rights to returns from a venture, rights similar to those of securitization and even voting rights.

In other words: both a token representing a share and one representing a debenture are, as a rule, securities. The public offering needs CVM registration or an exemption provided for in the rules.

On the debt side, the CVM was more specific. In April 2023, CVM/SSE Circular Letter 4/2023 addressed so-called “fixed income tokens” and “receivables tokens”. The technical staff reported having detected offerings of these tokens with the characteristics of securities without compliance with the rules and reinforced that classification does not depend on a prior statement by the CVM.

For small companies, a common route is investment crowdfunding, governed by CVM Resolution No. 88/2022. Under the consolidated text consulted in October 2026, the offering is exempt from registration if, among other conditions, the company has annual gross revenue of up to R$ 40 million, the raise does not exceed R$ 15 million per year and it is made through a registered platform. The rule applies to securities in general, which includes both equity and debt. The other limits of this route are in regulatory limits of tokenization.

Risks that apply to both

• Issuer risk. The token is worth what the company is worth (for equity) or its ability to pay (for debt). The blockchain improves neither.
• Liquidity. Reselling the token depends on an authorized trading venue and on buyers. Many tokens have no secondary market.
• Documentation. The rights are in the bylaws, the indenture or the contract, not in the token. If the document is weak, so is the right.
• Platform. Failures, bankruptcy or fraud at the tokenization platform affect the record and access to the investment.
• Total loss. With an equity token, total loss is a possible outcome whenever the business fails. With a debt token, it happens if the issuer goes bankrupt without sufficient assets.

These points are developed in why tokenizing an asset does not eliminate risk.

What to take from this article

Before looking at returns or technology, find out whether the token makes you a shareholder or a creditor. The shareholder bets on the success of the business, with no guarantee of receiving anything. The creditor is entitled to an agreed payment and goes ahead in bankruptcy, but depends on the issuer being able to pay. In both cases, the token is usually a security, and the offering must be within CVM rules. The digital format changes the record, not the risk.