A security token in blockchain technology acts as a digital representation of a real-world asset. These tokens can represent ownership or rights to an asset and are typically used within a blockchain-based environment. By using smart contracts, security tokens automate transactions and ensure that they are executed under predefined conditions. This enhances transparency and security, making tokenized assets easier to trade and manage. They are particularly significant for compliance with regulatory standards in finance, providing a new way for venture financing and investment in various industries.