For years, the crypto market has thrived on speculative capital flows and the popularity of decentralized finance (DeFi) tokens. This trend continues today in growing sectors such as perpetual decentralized exchanges and prediction markets. However, as Wall Street delves deeper into the tokenization of real-world assets (RWA), not all existing industry systems are compatible with the financial products that major institutions want to bring on-chain. This was reported by Cointelegraph.com reports .
Dario Lo Buglio, one of the authors of the newly finalized ERC-7943 (uRWA) token standard, argues that DeFi infrastructure is not designed for regulated financial assets. Such assets often require identity verification systems and compliance standards. According to Lo Buglio, co-founder of the Brickken platform, if regulated assets are brought onto the blockchain, legal regulation is unavoidable.
Currently, the ERC-3643 (T-REX) standard is widely used on the Ethereum network for tokenizing securities. This standard includes identity-based permissions and mechanisms that allow issuers to intervene in certain situations. However, Lo Buglio noted that this system was primarily built for securities and is not always suitable for other types of assets entering the blockchain market.
XYO co-founder Markus Levin believes that as the tokenization process becomes easier, ensuring these assets work across various compliance systems, custodians, and exchanges is becoming more difficult. Standards like uRWA help standardize personal data, permissions, and transfer rules for tokenized assets within Ethereum systems.
This new approach allows regulated assets to be more easily moved, verified, and integrated without each institution having to build its own separate infrastructure. This paves the way for broader integration of traditional financial institutions into blockchain technologies.
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