According to Blockworks, the ERC3643 Association has recently unveiled a new UI plug-in tool that allows DeFi protocols to run checks in compliance with the ERC3643 standard. Also known as the T-REX (Token for Regulated Exchanges) standard, ERC3643 is a modification of ERC-20 and a permissioned token that uses smart contract technology to define conditional transfer functions. This enables decentralized validators to approve certain transactions only after predetermined rules have been met, allowing for compliance structures to be used for regulated assets like securities while maintaining ERC-20 functionality.
The new UI tool was developed in collaboration with DevPro and Tokeny, enabling ERC-20-compliant DeFi applications to interact with permissioned ERC-3643 tokens, including real-world assets, token securities, loyalty tokens, stablecoins, and CBDCs. Dennis O’Connell, president of the ERC-3643 Association, explained that compliance rules are directly embedded through ERC-3643 at a token level, ensuring interoperability with any ERC-20-supporting applications while denying transactions or actions if counterparties fail to meet compliance requirements.
Unlike other standards that use wallet whitelisting for know-your-customer (KYC) checks, ERC-3643 uses digital identity to whitelist users through verifiable credentials, ensuring the compliance validation process is entirely on-chain while protecting privacy. The standard was initially proposed to the Ethereum community in 2021 but received approval only in December last year. Companies currently exploring this technology include APEX Group, Aztec Group, and Capgemini.