What is ERC-20

ERC stands for Ethereum Request for Comment. ERC-20 acts as the technical standard other Ethereum-based fungible tokens must comply with. It provides the set of guidelines developers must consider when generating a token on the Ethereum network such as the maximum number of tokens that could be generated or token cap, how tokens are transferred and the method for approving transactions. Compliance is important because it guarantees that tokens are compatible.

It itself is also a fungible token based on the Ethereum blockchain that can be used as digital currency or exchanged for fiat currency or other digital currencies.