ERC-20

ERC-20 is the Ethereum token standard for fungible tokens - tokens where every unit is interchangeable, like dollars or shares of the same class. It is a smart contract interface that defines a small set of functions every compliant token must implement, so that any wallet, exchange, or app can handle any ERC-20 token the same way without custom code.

The standard specifies the basics: check a balance (balanceOf), move tokens (transfer), and let a contract spend tokens on your behalf (approve and transferFrom). Because the interface is uniform, a new ERC-20 token works in existing infrastructure the moment it launches. Introduced in 2015, it is the most widely used standard on Ethereum - most stablecoins, including USDC, are ERC-20 tokens.

For real-world assets, ERC-20 is the base layer of fungibility, but on its own it is usually not enough for a regulated security. A plain ERC-20 token is permissionless: anyone can receive it and transfer it to anyone. A security token needs the opposite - it must restrict holders to approved investors and enforce transfer rules.

That gap is why security-token standards exist. ERC-3643 and ERC-1400 extend the ERC-20 model with identity checks, whitelists, and transfer restrictions, while staying compatible enough that ERC-20-aware tools can still read balances. So you can think of ERC-20 as the fungible foundation that regulated RWA standards build on, rather than the finished tool for issuing a security.

Source: Ethereum docs (ethereum.org), as of 2026.