The Ethereum Improvement Proposal ERC-3643 has successfully reached its final stage, solidifying its position as a widely accepted standard for tokenizing real-world assets.

The Ethereum community has officially endorsed the ERC-3643 Ethereum Improvement Proposal (EIP), marking it as an established standard for compliant tokenization of real-world assets (RWAs).

As of a December 15th announcement, the proposal has achieved its final status, indicating that it has undergone thorough review, discussions, and consensus within the Ethereum community. This process mirrors the approach taken for establishing previous standards such as ERC-20.

ERC-3643 serves as a comprehensive standard for tokenizing securities, RWAs, implementing payment systems, and facilitating loyalty programs. The proposal incorporates a self-sovereign identity (SSI) framework to verify users’ eligibility for tokens, providing anonymous yet verifiable credentials.

This approved standard, originally proposed in 2021, builds upon the ERC-20 framework and incorporates two distinct permission layers to enhance security and compliance.

The first layer focuses on verifying the identity and eligibility of the token recipient, utilizing ERC-734/-735 standards to verify the presence of necessary claims on the identity and authenticate them through trusted claim issuers. The second layer imposes global restrictions on the token itself, such as daily volume limits and maximum token holder thresholds, ensuring controlled and regulated token circulation.

Asset tokenization involves converting the value of physical or digital assets into digital tokens on a blockchain or distributed ledger. This approach offers various benefits, including increased liquidity, faster settlements, transparency, and accessibility to different markets. Real-world applications encompass fractional trading of real estate, art, financial assets, and intellectual property.

Management consulting firm Roland Berger estimates that the asset tokenization market will reach a value of $10 trillion by 2030, a significant increase from its current valuation of around $300 billion.

Asset tokenization is being explored by both traditional and crypto-native firms as a prominent trend in finance. Noteworthy companies, including JPMorgan, Goldman Sachs, and Societe Generale, are actively exploring the technology. Despite the challenges faced by the crypto industry, data from VanEck Research indicates that the total market capitalization for RWAs reached $342 billion in September.