A commodity doesn't promise a return for holding it, a security does. If I buy a gold bar, in a year I have a gold bar, same with a bushel of wheat, or 1million yen.
Securities use resources to try and generate a return -- companies try to sell a product, bonds generate interest, etc.
This is actually the only answer that is pertinent in this context, it should be up voted.
Securities generate returns, commodities do not.
The regulation proposals for tokens include a number of different categories: utilities (governance), securities (returns), commodities (holding), etc.
The categorization of tokens influence the amount of regulation they have to undergo: Exchanges, KYC, AML, etc.
For instance if a token is categorized as a security, then it is an investment product. You will need a SEC licence to sell it, perform KYC & AML on clients, have audits, etc.
> What’s the difference between a security and a commodity?
Securities: Stocks and Bonds
Commodities: Metals, Grains, and Oil
A commodity's defining feature is its interchangeability. One unit is essentially the same as another unit. To an orange juice company oranges are oranges, to an apple juice company apples are apples, and to an oil refinery one barrel of oil is a lot like any other barrel of oil. Commodities must meet certain minimum quality standards and markets do distinguish between different types of the same commodity. But for the most part it's about quantity.
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.
A commodity is (traditionally) a standardized physical good. A security is a tradable contract. It could for example give you the right to a certain sum of money per year, or partial ownership of a company, or the right to buy something at a certain price.
Some stable coins fit the security definition pretty well since they come with a right to redeem for dollars. Other cryptos don't really fit either.
it didn't address explicitly what all others were
“That’s the only one I’m going to say because I’m not going to talk about any one of these tokens”
https://twitter.com/SBF_FTX/status/1541565079992369155?s=20&...