Bank- Friendly Token Standard: ERC3643's Latest Innovation
In the rapidly evolving world of cryptocurrencies, a new standard is making waves - ERC-3643. Developed by Tokeny, a Luxembourg-based company, this standard is designed to bring traditional financial instruments onto the blockchain, aiming to tokenize Real World Assets (RWAs).
ERC-3643 is a standard for "permissioned tokens," which means it introduces a mechanism that verifies the identity and authorization of participants before allowing a transaction. This feature has found favour with many traditional and modern financial institutions, suggesting a potential migration to blockchains if ERC-3643 becomes the standard.
However, the adoption of ERC-3643 could have far-reaching implications. If a cryptocurrency is classified as a security, it could be required to use the ERC-3643 token format for exchanges. This could potentially be mandated by regulators for DeFi protocols, weakening crypto as a competitive force due to regulatory requirements.
From a crypto user's perspective, ERC-3643 is seen as a colonization of the ecosystem, a perversion of tokens and smart contracts that doesn't hesitate to trample on the core values of Bitcoin and crypto. Some argue that if this happens, ERC-3643 could become the most dangerous attack on the idealistic foundation of crypto to date.
On the other hand, ERC-3643 could expand the market for tokens and strengthen decentralized finance. Transfers of ERC-3643 tokens are linked to an on-chain ID system, ONCHAINID, which allows different parties to verify user identities while keeping the data off-chain. ONCHAINID is gaining traction as a potential standard for on-chain identities, and could establish a transferable identity and create a "Universal Login" for verified individuals.
Moreover, ERC-3643 allows numerous other options, such as granting certain rights to a third party or restoring lost tokens. If ERC-3643 becomes the standard, it could potentially end the confusion caused by various standards for RWA and crypto securities by setting a uniform, blockchain-spanning standard.
However, the growth of ERC-3643 carries the risk of it growing beyond Real World Assets and being treated as a replacement for existing tokens or cryptocurrencies. This could lead to it being classified as a security, which could have significant implications for the crypto market.
In conclusion, ERC-3643 is a standard that is generating much debate within the crypto community. While it has the potential to bring traditional finance onto the blockchain and expand the market for tokens, it also poses risks to the decentralized nature of cryptocurrencies and could weaken crypto as a competitive force due to regulatory requirements. As regulators and the crypto community continue to grapple with these issues, the future of ERC-3643 remains uncertain.
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