Movement Labs Leverages ERC-3643 For Compliant RWA Tokenization

Movement Labs is expanding the use of ERC-3643, a token standard for compliant real-world asset (RWA) tokenization, beyond the Ethereum Virtual Machine (EVM) ecosystem.

On Oct. 22, Movement Labs announced its membership in the ERC-3643 Association. The organization promotes the ERC-3643 standard, which facilitates identity-based permissioned tokens enabling regulatory compliance on-chain.

The move paves the way for the team’s upcoming Layer 2, Movement Network, to support ERC-3643. With the network leveraging Movement Labs’ Move Virtual Machine, M2, its deployment will mark the first ERC-3643 integration on a non-EVM chain.

"RWA tokenization was one of the core design principles of the Move language,” said Cooper Scanlon, the co-founder of Movement Labs.“We're excited for the many use cases supporting ERC-3643 enables on a molecular level of smart contract development, and are supporting ERC-3643 as the universal gold standard for real-world assets on-chain.”

The ERC3643 Association is a non-profit organization dedicated to promoting and standardizing complaint tokenization leveraging the ERC-3643 standard. Since its launch, the ERC3643 Association has grown to 78 members, including web3 projects, financial services companies, and legal firms.

Movement Labs launched in 2022 to advance the application of the Move programming language in web3. Move was originally developed by Meta for its Libra blockchain, which was announced in 2019. However, the Diem project shut down in January 2022.

Developers from Diem later went on to found Aptos Labs and Mysten Labs, the teams behind the Move-based Layer 1 blockchains Aptos and Sui.

ERC-3643

The ERC-3643 standard, also referred to as the Token for Regulated Exchanges (T-REX) standard, is a modification of the popular ERC-20 token standard.

ERC-3643 was first proposed in 2021 by Joachim Lebrun, the head of blockchain at Tokeny, and was finalized in December 2023.

T-REX allows developers to create conditional transfer functions, meaning ERC-3643 tokens can only be transferred between whitelisted users. Token permissions are linked to users’ on-chain identities, which are verified using a self-sovereign identity (SSI) framework.

The standard enables compliance structures for the creation of regulated tokenized assets while retaining the functionality of ERC-20 tokens.

Institutional adoption

T-REX has already attracted adoption from several major financial institutions.

ABN AMRO, a major Dutch financial institution, leveraged ERC-3643 for tokenizing real estate and corporate bonds. In September 2023, the bank launched a project tokenizing green bonds using ERC-3643 in alignment with EU regulations on sustainable finance.

On Feb. 14, Avalanche announced that Citi, a multinational investment bank with more than $2.9 trillion in assets under management, completed a pilot exploring permissioned tokenization trials using ERC-3643. The pilot was executed on an Avalanche subnet and tokenized private equity assets. It was conductedin collaboration with wealth management clients, including WisdomTree, Wellington Management, and ABN AMRO Bank.

Global financial services providers APEX Group, Aztec Group, and Capgemini are also exploring tokenization applications leveraging ERC-3643.