ICON, the decentralized network of blockchain communities, today announced it has released its own token specifications for 3rd-party market players interested in developing and commercializing blockchain-based assets and securities.
IRC16, a newly added token standard based on ICON’s public blockchain network, is designed to allow transparent issuance of tokenized assets and securities. Also, it supports simple tokenization of various physical assets through a modular architecture for built-in compliance with legal regulations related to asset ownership and transactions.
Tokenization of real assets, which divides, proves ownership, and allows for the sale of physical assets into smaller ‘token’ units, is expected to increase the liquidity of high-value assets and expand the size of existing investor pools over the long term.
Additionally, smart contracts act as intermediaries guaranteeing the settlement of asset trading between sellers and buyers, thereby simplifying the transaction process and minimizing brokerage fees. The process of reviewing and signing contracts in the existing offline environment is instead handled online through smart contracts.
Focusing on regulatory compliance, ICON’s IRC16 features four functions: Check for Token Transfer, Token Control by Operator, Document Management, and Partition.
As the legitimacy of issuing tokenized assets and securities is especially emphasized, ‘Check for Token Transfer’ function provides an interface that verifies whether token senders and recipients passed know-your-customer (KYC) and anti-money laundering (AML) procedures, and limits the number of investors that can initiate and receive token transfers. This feature also provides the reason for failure if the token transfer fails.
‘Token Control by Operator’ supports compliance with regulations regarding fraud or the loss of personal encryption (private) keys. ‘Document Management’ stores and manages relevant legal documents to ensure that the rights and obligations of token issuers and investors are observed. ‘Partition’ allows for partially fungible tokens, which allow issuers to attach metadata, including lock-up periods, to be built into a certain portion of the tokens.
The IRC16 source code can be found on its Github page.