A new Ethereum proposal is pushing the boundaries of privacy and compliance in real-world asset (RWA) tokenization. Developer Aryeh Greenberg has submitted a draft token interface that layers
A new Ethereum proposal is pushing the boundaries of privacy and compliance in real-world asset (RWA) tokenization. Developer Aryeh Greenberg has submitted a draft token interface that layers regulatory controls on top of confidential on-chain transfers, opening a fresh debate about how regulated assets can coexist with blockchain privacy.
Pull request #2034 extends ERC-7984 for confidential RWA tokens, maintaining confidentiality via an implementation-specific pointer-based system. In practical terms, ERC-7984 is a fungible token standard built from the ground up with confidentiality in mind, where all balance and transfer amounts are represented as ciphertext handles, ensuring no data is leaked to the public.
The new draft goes further. It adds compliance checks, asset freezing powers, and forced transfers to that confidential foundation. Crucially, selective disclosure is possible through view keys, allowing compliance and audit without making balances public. This means authorized parties could enforce certain transfers without exposing the underlying transaction amounts to the broader market.
The proposal remains an unmerged draft. It was submitted on September 25, 2026, and requires at least one more review from Ethereum editors before it can progress.
The tension between privacy and compliance is a long-standing challenge for institutional adoption of blockchain. Real-world assets often require regulatory compliance features not found in standard tokens, including the ability to freeze assets, perform enforcement transfers for legal compliance, and restrict transfers to authorized users. Existing frameworks like ERC-3643 address compliance for public tokens, but Greenberg's proposal is among the first to attempt this for tokens where balances and amounts are kept private by design.
For many use cases this level of transparency works fine, but for others, including payroll, institutional settlement, private DeFi strategies, and regulated finance, full public transparency is a dealbreaker. A confidential RWA standard could address exactly that gap, giving issuers the enforcement tools regulators expect while preserving the financial privacy that institutional counterparties increasingly demand.
The draft is still at an early stage and will need broader community review before it has any chance of becoming a formal Ethereum standard. Greenberg's prior work includes co-authoring ERC-7984 itself, which was first published in July 2025.
Sources:Ethereum ERCs Pull Request #2034: Add ERC Confidential Real World Asset Token (GitHub)ERC-7984: Confidential Fungible Token (Ethereum Improvement Proposals)ERC-7984: The Confidential Token Standard Explained (Zama)
