A token standard is a shared rulebook that defines how a token behaves on a blockchain - how it is transferred, counted, and read by wallets and apps. ERC-20 is the base standard for ordinary fungible tokens; ERC-3643 and ERC-1400 extend it for regulated securities that must control who can hold them. For a real-world asset that is a security, a plain ERC-20 is not enough, because it cannot enforce the rules securities law requires.

Key takeaways

• A token standard is a common interface so any wallet, exchange, or contract can work with a token without custom code.
• ERC-20 is the base fungible standard - simple, universal, and permissionless, which is exactly why it is wrong for a regulated security on its own.
• ERC-3643 and ERC-1400 build compliance into the token: only approved identities can hold it, and transfers can be restricted at the protocol level.
• The right standard follows the asset: utility and payment tokens use ERC-20; tokenized securities use a permissioned standard.

What is a token standard, and why does it exist?

A token standard is a set of functions a token agrees to expose - "transfer this amount," "report this balance," "approve this spender." Because every compliant token answers the same calls, a wallet or exchange can support thousands of tokens without writing code for each one. The standard is the reason you can hold many different tokens in a single wallet.

Most standards are "ERC" numbers - Ethereum Request for Comments - the proposals that the Ethereum community adopts as conventions. They are not laws; they are agreements. A token that follows ERC-20 will "just work" with the enormous ecosystem built around it, which is both ERC-20's great strength and, for securities, its problem.

ERC-20 - the base layer

ERC-20 is the standard almost everyone means by "a token." It defines fungible tokens - each unit identical and interchangeable - and powers most stablecoins and on-chain currencies. It is simple, battle-tested, and supported everywhere.

It is also permissionless by design: anyone can receive an ERC-20, and transfers cannot be blocked by the issuer. That is perfect for a currency and disqualifying for a regulated security, which by law may only be held by eligible, identity-verified investors. You can bolt controls onto an ERC-20, but the base standard has no concept of "who is allowed to hold this."

ERC-3643 and ERC-1400 - standards for securities

Two standards add that missing layer. The table shows how they compare to the base.

ERC-3643, often called T-REX, builds permissioning in through on-chain identity. Each holder has a verified identity credential, and a compliance module checks every transfer against the rules before it can settle - so an unapproved wallet simply cannot receive the token. It is a focused standard for permissioned, compliant security tokens.

ERC-1400 is a broader suite of security-token standards. Its signature feature is partitions: a single token can be split into tranches - say, locked versus freely transferable, or different share classes - each with its own rules, plus hooks for attaching legal documents and forcing transfers when a regulator or court requires. Both standards share the core idea: a transfer restriction enforced by the protocol, usually backed by a whitelist of approved wallets.

Which standard does an RWA need?

Match the standard to the asset. A payment or utility token uses ERC-20. A tokenized security - fractional real estate, a credit fund, a tokenized Treasury - needs a permissioned standard so the token can enforce eligibility and transfer rules itself, rather than relying on a registrar to catch violations after the fact.

The choice is not only technical. A standard that supports fractional ownership with built-in compliance lets a deal onboard many small investors while staying inside securities law automatically. As of 2026, ERC-3643 and ERC-1400 are the two most common choices for serious RWA security tokens, and which one fits depends on whether the deal needs multiple share classes and forced-transfer powers, or a single clean permissioned class.

Where to go next

• Next: the tokenized asset lifecycle - how these tokens live from issuance to redemption.
• The builder's side: choosing a token standard for your offering.
• Glossary: security token.

Sources: ethereum.org (EIP registry); ERC-3643 Association, as of 2026.