Ethereum draft would add compliance checks to confidential RWA tokens
A developer proposes confidential tokens that still follow issuer rules
Developer Aryeh Greenberg has proposed an Ethereum token interface that would add compliance checks and issuer enforcement powers to confidential tokens representing real-world assets. Real-world assets, often called RWAs, are tokens that stand in for things like bonds, funds or other traditional assets.
The submission is pull request #2034, opened Thursday evening ET. It remains an unmerged draft, meaning it has not been accepted or added to Ethereum's standards process.
The draft extends ERC-7984, a draft interface that represents balances and transfer amounts as confidential pointers. A pointer here is a reference to a protected value rather than a number that anyone can read on the blockchain.
Key points from pull request #2034
- The draft adapts the finalized ERC-7943 real-world asset interface, which already defines eligibility checks, freezing and forced transfers for conventional tokens.
- Applications could publicly check whether an address is eligible to send or receive, while a particular transfer and the balance available to spend would be checked through confidential results.
- Spendable balances must account for restrictions such as freezes, lockups and vesting.
- An authorized party could force a transfer without the holder's consent. That function bypasses the normal confidential transfer check but must reject an ineligible recipient.
- The draft does not set out separate interfaces for minting, burning, halting or freezing, leaving those mechanisms to whoever implements the standard.
Privacy design is left open, and failed transfers need care
The proposal does not mandate one cryptographic system, and it does not decide who is allowed to resolve the confidential pointers. That makes the level of privacy dependent on each implementation.
Greenberg's draft also notes that confidentiality changes how failure works. It recommends moving zero tokens instead of reverting a transfer that breaks the rules, because a public failure can leak balance information. Applications should check the amount that actually moved rather than treating a successful transaction as proof of payment.
A second open draft relies on a notary
Another open proposal, pull request #1850, takes a different route. Its Notary-Backed Confidential Token draft keeps ownership and amounts off the blockchain and uses a designated notary to validate private transactions. The public contract records commitments and prevents reused inputs.
The trade-off is stated plainly in the draft: it warns that a compromised notary could submit invalid transactions or inflate the private supply.
Why Canton keeps coming up in the institutional privacy debate
The same privacy requirement helps explain institutional interest in Canton. In a June 4 announcement, Visa and Brale outlined a proof of concept using Brale's SBC stablecoin on Canton. Visa said control over sensitive settlement data was a central focus.
Visa's head of crypto, Cuy Sheffield, said the work targets settlement requiring "both programmability and privacy controls."
Canton describes itself as a public Layer 1 blockchain, meaning a base network open to participants. Its privacy model shares only the relevant parts of a transaction with entitled participants, while its Daml contracts define who can act and see data. The Ethereum draft takes a different approach: it standardizes token functions while leaving the underlying privacy system to each implementation.
What is confirmed
Pull request #2034 is an open, unmerged draft from Aryeh Greenberg that extends ERC-7984 and adapts compliance features from the finalized ERC-7943 interface. Pull request #1850 is also open and describes a notary-backed confidential token design. Visa and Brale's Canton proof of concept and Sheffield's comments were announced by Visa.
What is still unclear
Neither draft has been merged or adopted. The sources do not say whether either will move forward, which cryptographic system implementations would use, who would resolve confidential pointers, or who would hold the authority to force a transfer. No timeline is given.
Why this matters for tokenized asset projects
Issuers of tokenized real-world assets need to keep transaction amounts private while still being able to enforce rules such as eligibility, freezes and forced transfers. The draft is an attempt to fit both needs into one token interface on Ethereum, rather than moving such activity to a network with its own built-in privacy model.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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