The engine behind tokenised securities: ERC3643

Written by Luc Falempin co-founder Tokeny

In 2017, during the ICO boom, we began developing tokenization solutions for securities and real-world assets to bring control and compliance. The ERC-20 tokens had already demonstrated to the market the potential of blockchain as a shared infrastructure for transferring bearing assets. By directly managing tokens in their wallets, users could transfer the token ownership peer-to-peer without intermediaries, bringing unprecedented efficiency, accessibility and liquidity to the cryptocurrency market. Financial markets, especially private markets, are craving the same level of efficiency, accessibility and liquidity. The catch is that tokenised securities cannot be permissionless tokens like ERC-20 tokens, which can be transferred to anyone. They must be permissioned tokens in order to track ownership and make sure that only eligible investors can hold tokens, in order to comply with securities laws. Five years ago, there was no token standard available on the market that could meet this requirement. So, we took the initiative to develop an open-source standard to address this need. The first version of the token standard was developed in 2018, initially called T-REX (Token for Regulated Exchanges), and later recognised by the Ethereum community as ERC3643.