ERC-3643 and Kadena: Building Compliance for Institutional RWAs

Real-world asset (RWA) tokenization represents a fundamental shift in how we approach asset ownership and transfer. This technology allows anyone to buy a fraction of a tokenized government bond or an energy-positive housing development and receive the corresponding deed almost instantaneously. This eliminates manual documentation and traditional settlement windows.

That seamless hand-off explains the growing interest among banks, asset managers, and regulators: the technology enables real assets to be transacted with blockchain-level efficiency while maintaining full regulatory compliance.

The convergence of speed and safety is the central theme of our new report on the state of real-world asset tokenization standards. Our research examines the critical shift away from legacy standards toward the compliance-focused technology now opening up the institutional market.

Compliance is the New Scalability

For most of the 2010s, Web3 industry discourse focused on transactions per second (TPS) metrics. Yet, the institutions with the deepest pockets kept repeating a different metric — regulatory risk per transaction. KYC (Know Your Customer) files, AML (Anti-Money Laundering) checks, and accredited investor caps: failure to satisfy any of these requirements can jeopardize the transaction.

Legacy standards like ERC-20 and ERC-721 were born for permissionless playgrounds. Their fundamental limitation is their design as digital bearer instruments; whoever holds the token owns the asset. The lack of built-in transfer restrictions to verified investors or enforceable jurisdiction-specific rules creates a major compliance gap.

As our July 2025 RWA tokenization standard report lays out, “The infrastructure bottleneck isn't institutional interest, it's compliance [...] Without that foundational infrastructure, you're just building another speculative market instead of upgrading capital markets.”

Baked-In Compliance

The ERC-3643 token standard answers those limitations as it bakes legal logic straight into the token contract. It hosts:

• Built-in Identity Verification: ERC-3643 tokens can have an identity registry linked to them. This means an issuer can ensure that only pre-vetted, verified individuals can hold or receive the token, preventing anonymous transfers that break securities laws.
• Permissioned Transfers: Issuers may program jurisdictional or accreditation rules directly into the token, effectively embedding compliance oversight within each asset.
• Programmable Compliance: The rules aren't static. As regulations change, the token’s smart contract can be updated to reflect the new legal landscape, guaranteeing the asset remains compliant throughout its lifecycle.

This standard effectively solves the compliance puzzle at the protocol level, rather than trying to “bolt it on afterward.” It furnishes the trust and security that institutions need to confidently move trillions of dollars in real-world assets onto blockchain infrastructure.

Market Snapshot: Billions Today, Trillions Tomorrow

Our report estimates RWA tokenization already holds $12.9 billion–$25 billion in total value locked (TVL). Analysts project the sector will soar to $2 trillion–$11 trillion by 2030.

The rationale for this projection is that compliance constraints no longer impede growth. With new token standards, a pension fund can tokenize private credit, an energy firm can tokenize invoices, and both can trade globally in minutes.

Kadena's Edge: Where Compliance Meets Scalability

While ERC-3643 defines the compliance framework, Kadena provides the enterprise-grade infrastructure on which this emerging market can operate. At Kadena, we’ve integrated these compliance principles into our own token standard, powered by an infrastructure designed for global scale.

Our platform is built on two key pillars:

1. Pact Smart Contract Language: Kadena created Pact, a human-readable smart contract language designed for safety. Pact is “Turing-incomplete,” meaning that it deliberately limits computational complexity to reduce the risk of vulnerabilities. Built-in safety checks allow developers to test contracts prior to deployment — an essential safeguard when managing high-value assets.
2. Chainweb Architecture: Kadena is not limited to a single traditional blockchain; it is a network of interconnected chains that work in parallel. This “braided” architecture means it can handle massive transaction volumes without the high fees or network congestion seen on other platforms. This approach is essential for a future where millions of tokenized assets are being traded every second.

Furthermore, with full Ethereum Virtual Machine (EVM) compatibility rolling out with Chainweb EVM, Kadena is opening its doors for ERC-3643 tokens on a more scalable and secure platform. To accelerate this vision, we’ve recently launched a $25 million grant initiative for RWA tokenization. Pioneers like CurveBlock, a real estate fund tokenizing carbon-zero properties, are already leveraging Kadena to demonstrate real-world applications.

A Multi-Chain World: Other Players in the RWA Space

The movement toward compliant asset tokenization isn't happening in a vacuum. Our report also acknowledges the contributions of other innovative platforms:

Stellar (XLM): Known for its speed and low cost, Stellar is optimized for asset issuance and payments, making it a strong contender for specific RWA use cases.

Algorand (ALGO): Algorand offers high-speed transactions and features like Role-Based Asset Control (RBAC), serving as another robust environment for creating and managing regulated assets.

As the market moves from billions to trillions, the ultimate challenge will be scaling securely. With an architecture designed for infinite scalability and Bitcoin-level security, Kadena is positioned to become the foundational layer for this next generation of finance.

The Road Ahead: From Billions to Trillions

The journey is just beginning. While standards like ERC-3643 and Kadena's own protocol have laid the groundwork, the industry is still working on key challenges like cross-chain compatibility to move assets freely between blockchains and integrating seamlessly with traditional legal systems.

But the momentum is undeniable. We are moving from a world of speculation to a world of utility, where blockchain technology is fundamentally upgrading the rails of global finance. Compliant, secure, and scalable asset tokenization is the engine of that change.

Access the full report: click here