ERC-3643
ERC-3643 is a token standard for assets whose transfers depend on investor eligibility and compliance rules. The standard combines a token contract with an identity system that checks whether a recipient meets the required conditions. Issuers can use these checks to apply restrictions to tokenized financial instruments throughout their transfer and ownership lifecycle.
Known as T-REX, short for Token for Regulated EXchanges, ERC-3643 works on Ethereum and compatible blockchains. The contracts can check investor eligibility before a transfer and support authorized recovery or correction of holdings. These functions help connect a token's technical operation to the ownership restrictions and administrative requirements of its issuer.
From a share register to a permissioned token
An ordinary ERC-20 token can be sent to any address. A security cannot: transfer restrictions, investor qualification and country rules apply, and the registrar must know who the holder is. The ERC-3643 specification, created on 9 July 2021 and now final, describes itself as an institutional grade security token standard. ERC-3643 tokens stay ERC-20 compatible and all ERC-20 functions can be called, but every transfer first runs an eligibility and compliance check.
How ERC-3643 works
The standard splits the work into several smart contracts. The identity registry links each investor wallet to an identity contract, called ONCHAINID, and a country code. The identity contract holds signed claims, for example that an identity check was passed. A trusted issuers registry lists whose claims count, and a claim topics registry lists which claims an investor needs. A compliance contract holds the rules of the offering, such as investor caps or country restrictions, and answers whether a given transfer may happen.
An agent of the issuer can freeze a wallet or part of a balance, force a transfer to another verified address, and recover tokens for an investor who lost the key to a wallet; the recovery is logged on chain. A transfer agent or a crypto securities registrar uses such functions to correct a register.
The association and its members
The ERC3643 Association is a non-profit association with its address at the Tokeny office in Luxembourg. The founding members of the ERC3643 Association include Apex Group, Tokeny, Invesco, Archax, Bitstamp, Capgemini, Polygon, DFNS and the law firms CMS, DLA Piper and Norton Rose Fulbright. The association states that more than 32 billion US dollars in assets have been tokenized with the standard.
A token standard is one layer of a tokenized security. Which law makes the token a security is a separate question; in Germany it is the Electronic Securities Act and its crypto securities registrar. How the token is identified in market data is a third: the Digital Token Identifier Foundation issues the ISO 24165 code for tokens.
Upcoming events on tokenization in Germany
Finance Loop and ERC-3643
The Digital Token Identifier Foundation, which assigns ISO 24165 codes to digital tokens, is an event and network partner of Finance Loop, and so is the Multichain Asset Managers Association. Finance Loop has a cooperation with 21X, the Frankfurt venue that trades and settles tokenized securities.
Digital Infrastructure & Sovereignty
Investment & Digital Assets
Risk & Compliance
What is ERC-3643?
ERC-3643 is an Ethereum token standard for permissioned tokens, also called T-REX. ERC-3643 checks every transfer against an identity registry and a set of compliance rules, which makes it suitable for securities.
What is ONCHAINID?
ONCHAINID is the identity contract of an investor in ERC-3643 and holds signed claims from trusted issuers, for example a passed identity check, which the token reads before it allows a transfer.
What is the difference between ERC-3643 and ERC-20?
ERC-3643 tokens are ERC-20 compatible, but each transfer runs eligibility and compliance checks, and an issuer agent can freeze, force-transfer and recover tokens. A plain ERC-20 token has none of these controls.
Does ERC-3643 make a token a security in Germany?
ERC-3643 is a technical standard; whether a token is a security follows from the law, in Germany the eWpG for electronic securities, and a licensed registrar keeps the crypto securities register.
ERC-3643 and Finance Loop
Finance Loop covers ERC-3643 in its Digital Infrastructure & Sovereignty track, next to smart contracts, token identifiers and the registers behind tokenized securities. Finance Loop brings people from banks, registrars, law firms and tokenization platforms together at events in Frankfurt, Munich, Berlin and Hamburg.
Finance Loop is a professional network supporting the institutional use of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.