The Ethereum community accepts ERC-3643 as the standard asset token

The Ethereum community has officially signed on to the ERC-3643 Ethereum Improvement Proposal (EIP), establishing compliance with real-world assets (RWAs) as a recognition standard.

According to the December 15 announcement, the proposal has reached the final stage, which means that it has been formally reviewed, discussed and agreed upon in the Ethereum community. It is a similar process to the way ERC-20 and other popular standards were established in the past.

The Ethereum community approved #ERC3643 as the first #Tokenization standard

We are proud to announce that the ERC3643 standard has reached the ‘Final' stage of the #Ethereum Improvement Proposal (#EIP).

Read more here: pic.twitter.com/DhR3XmGrVU

— ERC3643.org (@ERC3643Org) December 15, 2023

ERC-3643 is a standard for security tokens, RWAs, payment systems and loyalty programs. It verifies users' eligibility through the Self-Sovereign Identity (SSI) framework, providing anonymous yet verifiable credentials, the association behind the idea explained.

In the year The approved standard proposed in 2021 builds on top of ERC-20 and includes two separate layers of authorization to improve security and compliance.

The first layer focuses on the identity and eligibility of the recipient of the transaction using ERC-734/-735 standards to ensure that the necessary claims to identity exist and are verified by trusted claimants. The second layer applies global restrictions on the token itself, such as a daily token amount limit and maximum number of token holdings, providing control and regulated token transfer.

Asset tokenization involves the conversion of physical or digital value into a digital token on a blockchain or distributed ledger. Potential benefits of asset tokenization are increased liquidity, faster settlement, transparency and access to different markets. Real-world applications include enabling fractional trading of real estate, art, financial assets and intellectual property.

Management consulting firm Roland Berger estimates that asset tokenization will grow to a $10 trillion market by 2030, about $300 billion higher than its current value.

Asset tokenization is being considered as one of the major trends in finance by various traditional and crypto-native companies. Companies exploring the technology include JPMorgan, Goldman Sachs and Societe Generale. According to data from VanEck's research, the total market capitalization of RWAs reached $342 billion in September, despite the windfall of the crypto industry.

Magazine: Beyond Crypto – Zero-Knowledge Proofs From Voting to Finance