ERC contains this text: “The sender account (in the source chain) and receiver account (in the destination chain) MUST be represented using CAIP-10 account identifiers”. Unfortunately CAIP-10 for Ethereum addresses ( EIP155 Namespace, aka EVM Chains - Addresses | Chain Agnostic Namespaces ) contains this: “Anywhere “Postel’s Law” can apply, implementers SHOULD produce checksum-case secure addresses (whether in CAIP-10 or native format), and SHOULD accept both checksum case and legacy lowercase addresses, except where the security concerns of the particular usecase outweigh interoperability”.
In other words, CAIP-10 for Ethereum doesn’t contain definitive answer whether address should be lowercase or EIP-55 encoded. I think this is bad, so I reported this to CAIP: CAIP-10 and CAIP-19: mandate case-normalization · Issue #351 · ChainAgnostic/CAIPs · GitHub . But, as well as I understand, CAIP editors don’t plan to change anything here.
So, ERC-7786 should make its own decision here.
Also, another option may be to use CAIP-50 instead (it is binary) or CAIP-350 a. k. a. ERC-7930 (it is binary, too) ( New CAIP profile: interoperable address binary specification by 0xteddybear · Pull Request #350 · ChainAgnostic/CAIPs · GitHub , ERC 7930: Interoperable Addresses )