A new standard for ERC-3643 tokens was created on the Ethereum network, which is designed to improve the security and compliance of the tokenization process. The standard is based on a framework that enables user authentication while maintaining anonymity.
The Ethereum community adopted the ERC-3643 Ethereum Improvement Proposal (EIP), which creates the first ever standard for secure tokenization of real-world assets (RWA).
ERC-3643 is the standard for tokenization of securities, RWAs, payment systems, and loyalty programs. It verifies a user’s eligibility for a token through a self-sovereign identity (SSI) framework by providing anonymous but verifiable credentials.
The approved standard was proposed in 2021 and envisioned the creation of institutional-grade security tokens for regulated exchanges (T-REX). The ERC-3643 standard is based on:
- ERC-20 standard.
- ERC-734/-735 standards to verify that the necessary identity requirements and authentication by trusted claim issuing authorities are in place.
The standard also relies on mechanisms that implement global restrictions on the token itself, designed to ensure a controlled and regulated flow of assets. In particular, restrictions on:
- the daily volume of tokens;
- the maximum number of token holders.
The process of tokenization opens up the possibility of increasing the liquidity of certain assets, speeding up settlement, enhancing the transparency of transactions, and expanding accessibility to different markets. These advantages of asset tokenization attract the attention of representatives of large financial companies.
The technology is being actively studied and introduced by such TradFi giants as JPMorgan, Goldman Sachs, Euroclear, and others, as well as by the authorities of various countries of the world, the obvious leader among which is Singapore. The country is assessing the prospects of the technology within the framework of Project Guardian. Analysts estimate that the tokenized assets market could reach $5 trillion by 2030.
