Navigating RWA Compliance: ERC-3643 and the Future of Regulated DeFi

The Compliance Challenge

For RWA tokenization to reach its full potential, it must work within regulatory frameworks. Securities laws, KYC/AML requirements, and investor accreditation rules don't disappear just because an asset is on-chain. The challenge is building compliance into the protocol layer without creating centralized bottlenecks.

ERC-3643: The Security Token Standard

ERC-3643 (formerly T-REX) is an Ethereum token standard specifically designed for compliant security tokens. Unlike ERC-20 tokens that can be freely transferred, ERC-3643 tokens incorporate identity verification and transfer restrictions directly into the smart contract.

Key Features of ERC-3643

On-chain Identity Registry: Verified investor identities are stored on-chain, enabling automatic compliance checks during transfers. Modular Compliance: Different compliance rules can be implemented for different jurisdictions or asset types. Recovery Mechanisms: Lost tokens can be recovered by authorized parties, addressing a key concern for institutional investors. Granular Permissions: Issuers can freeze tokens, pause trading, or implement other controls required by regulators.

How ubqty Implements Compliance

ubqty builds on ERC-3643 with additional features tailored for RWA tokenization. Our compliance module integrates with leading KYC providers, supports multiple identity standards, and provides real-time reporting for regulatory requirements. Asset issuers can configure compliance rules through our dashboard, and investors complete verification once to access multiple tokenized assets.

The future of RWA isn't about avoiding regulation—it's about making compliance seamless and programmable. With the right infrastructure, tokenized securities can be more compliant than traditional securities while still benefiting from blockchain's efficiency and transparency.