Articles on: Blockchain & Security Tokens

What is the ERC-3643 standard?

ERC-3643 security tokens represent fractional ownership of real-world assets (RWA), such as property or commodities, and are issued on Ethereum virtual machine (EVM) compatible networks like Ethereum, Polygon, and Avalanche.

The ERC-3643 standard was originally developed by Tokeny, a leading provider of tokenisation solutions, and is a compliance-focused standard developed to bridge the traditional finance (TradFi) and decentralised finance (DeFi) worlds. ERC-3643 was developed specifically to allow for the the compliant issuance and management of security tokens on public networks like Ethereum.

Compliance is a critical aspect of any security, and ERC-3643 ensures that tokens are issued and traded in compliance with relevant regulations. Token issuers can implement a range of compliance features, such as KYC & AML checks, or limiting transfers by jurisdiction. These tokens can also be permissioned, ensuring that only qualified investors can hold them, as transfer to an unqualified wallet will fail. By enabling issuers to tokenise real-world assets in a compliant manner, ERC-3643 security tokens provide a new avenue for investment in traditionally illiquid assets. This opens up new opportunities for investors and issuers alike, while also helping to democratize access to investments.

As ERC-3643 tokens are compatible with multiple EVM-based networks, issuers can choose the network that best suits their needs, while ensuring interoperability across networks.

The advantages of ERC-3643 security tokens align with the current issues faced by the banking and crypto sectors. Traditional banking has been struggling with low interest rates and a lack of innovation, while crypto has been plagued by volatility and regulatory uncertainty. ERC-3643 security tokens offer a solution to these issues by combining the benefits of traditional assets with the flexibility and transparency of blockchain technology. They provide a new avenue for investment while ensuring compliance with regulations.

ERC-3643 security tokens represent a new era in finance, offering a compliant and secure way to invest in real-world assets. By combining the benefits of traditional assets with the flexibility of blockchain technology, these tokens provide a path forward for both the banking and crypto sectors.

Enegra is proud to be leading the sector with EGX, an ERC-3643 compliant security token representing the equity of Enegra Group Ltd.

Updated on: 18/08/2023

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