The Ethereum community has approved the Ethereum Improvement Proposal (EIP) ERC-3643, establishing it as a recognized standard for the compliant tokenization of real-world assets (RWAs). According to the announcement made on December 15, the proposal has reached its final status and has been officially reviewed and accepted within the Ethereum community. This step is notable as it follows a similar process to that used for establishing popular standards in the past, such as ERC-20.
ERC-3643 is considered a standard for creating security tokens, RWAs, payment systems, and loyalty programs. The group behind the proposal stated that it provides anonymous yet verifiable identity information by allowing users to verify the legitimacy of a token through a self-sovereign identity (SSI) framework.
The standard, proposed and approved in 2021, is based on ERC-20 and includes two separate permission layers to increase security and compliance. The first layer focuses on examining the identity and eligibility of the transaction recipient, checking whether the required claims exist and have been verified by reliable claim issuers, using the ERC-734/-735 standards.
The second layer implements global restrictions, such as daily token volume and the maximum number of token holders, to ensure that the token is under control and has a regulated circulation. Asset tokenization involves converting the value of a physical or crypto asset into a crypto token on a blockchain or distributed ledger.
Potential benefits of asset tokenization include increased liquidity, faster approval processes, transparency, and access to diversified markets. Real-world applications enable fractional trading of real estate, art, financial assets, and intellectual property. Management consulting firm Roland Berger predicts that asset tokenization could reach a market value of 10 trillion dollars by 2030, representing a significant increase from the current estimated value of approximately 300 billion dollars.