Tokens, stablecoins and NFTs: what they are and how they differ

Native coin and token: the core difference

ETH is Ethereum's native coin: the network knows it out of the box, gas is paid with it and validators use it to guarantee their work. No company issues it.

A token, on the other hand, is created by a smart contract. The contract keeps a table of which address holds how many units, and rules to move them. When your wallet shows “100 USDC”, it's actually reading your row in the USDC contract's table.

Creating a token is easy and cheap. That's why a token's existence says nothing about whether it's worth anything or who's behind it.

Two practical consequences. First, to move a token on Ethereum you pay gas in ETH, because you're running its contract. Second, anyone can create a token with the same name and symbol as a well-known one. What really identifies a token is its contract address, and you have to get that from an official source.

Standards: the common language of tokens

So that any wallet or application understands any token, contracts follow public standards. The three most used were born on Ethereum:

Approvals

For an application to move your tokens —a decentralized exchange, for example— you first give it an approval: permission to spend up to a certain amount of one of your tokens. Many applications ask for unlimited approvals for convenience. If that contract is malicious or gets hacked, it can drain that token from your wallet. Review your approvals now and then —Etherscan's token approval checker is built for this— and revoke the ones you no longer use.

Stablecoins: digital dollars

A stablecoin is a token that aims to hold a stable value, almost always one US dollar per unit. Hundreds of billions of dollars in stablecoins are in circulation, used to pay, to save in dollars and to move value across countries at any hour. The key question with any of them is just one: what backs it.

TerraUSD is the classic warning. In May 2022 it lost its dollar peg within days and dragged down its sister token, LUNA. Tens of billions of dollars in value vanished, and in 2023 the US SEC charged the company and its founder with fraud.

Who regulates them

• European Union: the MiCA regulation has applied rules to stablecoins since June 30, 2024.
• United States: the GENIUS Act, signed on July 18, 2025, created a federal framework for payment stablecoins, with one-to-one reserves in liquid assets.
• Chile: the Fintech Law gave the Central Bank powers to regulate stablecoins as a means of payment, and the Bank announced a proposal for late 2026. We summarize it in crypto regulation in Chile.

NFTs: a unique record

An NFT (non-fungible token) is an ERC-721 or ERC-1155 token with its own number: the contract records which address owns each number. What that number represents is defined by its metadata: a name, an image, attributes. That metadata is almost never on the blockchain, because storing files there is extremely expensive; the token points to a file stored somewhere else.

What you buy when you buy an NFT

• You buy the record. The blockchain says your address holds token number such-and-such from that contract. That's verifiable and transferable.
• You don't buy the copyright. In Chile, as in most of the world, buying a copy or a token doesn't transfer the rights in the work (Law 17,336). What you can do with the image is defined by the project's license.
• You depend on where the file lives. If the image sits on an ordinary server and the project shuts it down, your token points to nothing. Decentralized file systems, such as IPFS, reduce that risk.

Beyond art, NFTs are used for very concrete things: event tickets, certificates, memberships, game items. Your .eth name is, in fact, an NFT: that's why you can transfer it like any other asset in your wallet.

Governance tokens

Some tokens give the right to vote on a protocol's decisions. With the ENS token, for example, you vote in the ENS DAO, which manages the naming system and its treasury. A token that grants votes doesn't have guaranteed value, nor does it guarantee its project will last.

How they are taxed in Chile

For the SII, Chile's tax authority, gains from selling, swapping or exchanging crypto-assets must be declared, and that includes trading one token for another. Since 2026, crypto-asset service providers also report their clients' transactions every year. The details are in crypto taxes in Chile.

Before you buy or receive a token

1. Check the contract address on the project's official source, not by name or symbol.
2. Ignore tokens that show up on their own in your wallet. Don't move them or visit their site.
3. Review your approvals and revoke the ones you no longer use.
4. Ask what backs a stablecoin and who can freeze it.
5. With an NFT, read the license and check where the file is stored.

Where to go next

If a token can represent dollars, it can also represent a bond, a share in a fund or a property. That's tokenization, and it's the next block: what tokenization is and why banks are testing it.