ERC-3643 is looking for ways to bring compliance to RWA tokenization

ERC-3643 is designed to deny transactions or actions if counterparties fail to meet compliance requirements

article-image

Shubham Dhage/Unsplash and Adobe modified by Blockworks

share

The ERC3643 Association recently revealed a new UI plug-in tool that will enable DeFi protocols to run checks in compliance with the ERC3643 standard.

The ERC3643 standard, also known as the T-REX (Token for Regulated Exchanges) standard, is a modification of ERC-20. 

Unlike the ERC-20 token, ERC-3643 is a permissioned token that uses smart contract technology to define conditional transfer functions. 

This means that decentralized validators can only approve certain transactions after they have met predetermined rules. This enables compliance structures that can be used for regulated assets, like securities, while retaining the standard of ERC-20 functionality. 

This new UI tool was developed in collaboration with DevPro and Tokeny and enables ERC-20-compliant DeFi applications to interact with permissioned ERC-3643 tokens. This includes real-world assets, token securities, loyalty tokens, stablecoins and CBDCs

Read more: Ethereum Improvement Proposals to watch in 2024

Dennis O’Connell, president of the ERC-3643 Association, told Blockworks that compliance rules are directly embedded through ERC-3643 at a token level.

“As an extension of ERC-20, ERC-3643 ensures interoperability with any ERC-20-supporting applications. The key distinction lies in denying transactions or actions if counterparties fail to meet compliance requirements, effectively bridging compliance and interoperability,” O’Connell said. 

He notes that, unlike other standards that use wallet whitelisting for know-your-customer (KYC) checks, ERC-3643 uses digital identity to whitelist users through verifiable credentials. 

“This ensures the compliance validation process is entirely on-chain while protecting privacy. No actual data will be published on-chain; only verifiable credentials, which are proofs of verification by trusted parties appointed by token issuers,” O’Connell said. 

Read more: Dencun and Pralectra: Ethereum core devs chart an ambitious 2024

The standard was initially proposed to the Ethereum community in 2021, but did not receive approval until December last year. Companies currently exploring this technology include APEX Group, Aztec Group and Capgemini, to name a few.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

dydx unlimited.png

Research

dYdX Unlimited is a revamp to the protocol's design and tokenomics.

article-image

A strategic currency devaluation does have some historical precedent in China

article-image

Bitwise execs predicted Tuesday that bitcoin ETFs will attract more flows next year than they did in 2024

article-image

Extended is ramping up its hybrid derivatives exchange with a key offering

article-image

The middleware blockchain infra platform is breaking the “one-size-fits-all” mold that comes with existing blockchain tech stacks

article-image

Things may look grim, but there’s still time for altcoins to turn things around in 2024

article-image

Margarita Finance allows users to mix their yield appetite and risk tolerance — just like a cocktail