Skip to content Skip to sidebar Skip to footer

The Ethereum community is adopting ERC-3643 as a standard for asset tokenization.

The Ethereum community has officially signed the Ethereum ERC-3643 Improvement Proposal (EIP), establishing it as the recognized standard for interoperable real-world asset (RWA) tokenization. According to the announcement on December 15, the proposal has reached final status, meaning it has been formally reviewed, discussed and agreed upon by the Ethereum community. This process is similar to how ERC-20 and other popular standards were created in the past.

ERC-3643 is a standard for tokenization of securities, RWA, payment systems and loyalty programs. It verifies users’ eligibility to receive a token through a sovereign identity (SSI) framework by providing anonymous but verifiable credentials, explains the association behind the proposal. The approved standard, proposed in 2021, builds on ERC-20 and includes two separate levels of permissions to improve security and regulatory compliance.

The first layer focuses on the identity and authority of the recipient of the transaction, using ERC-734/735 standards to verify that the necessary identity claims are present and that the trusted claim senders have their authenticity. The second layer implements global restrictions on the token itself, such as limits on the daily supply of tokens and the maximum number of token holders, ensuring a controlled and regulated circulation of tokenized assets.

Asset tokenization is seen by a wide range of traditional and crypto firms as one of the major trends in finance. Notable companies exploring this technology include JPMorgan, Goldman Sachs and Societe Generale. Data from VanEck Research shows RWA’s total market capitalization reached $342 billion in September despite headwinds in the crypto industry. Asset tokenization involves converting the value of a physical or digital asset into a digital token on a blockchain or distributed ledger. Possible benefits of asset tokenization include increased liquidity, faster settlement, transparency, and availability across multiple markets. Real-world applications include the ability to fractionally trade real estate, artwork, financial assets and intellectual property. ASTL Investment Project experts estimate that the asset tokenization market will grow to $10 trillion by 2030, a significant increase from its current value of around $300 billion.

Leave a comment