ERC-3643: A New Standard for Regulated Tokens Explained

As the web3 ecosystem continues to evolve, standards play an essential role in bringing innovation and consistency to the representation of real-world assets (RWAs). An emerging standard quietly gaining traction is ERC-3643, which provides a framework for regulated tokens on Ethereum and other EVM-compatible blockchains.

We’re excited to announce that we’ll soon be rolling out support for ERC-3643 in Chainlens Blockchain Explorer. In this post, we’ll provide a brief overview of this important standard for RWA tokens.

What Is ERC-3643?

ERC-3643, also known as the Regulated Token Standard, is designed to facilitate the creation and management of regulated tokens. These tokens are typically subject to compliance requirements such as Know Your Customer (KYC) checks and anti-money laundering (AML) regulations.

You can think of it as extending the behaviour of an ERC-20 token to offer functionality that is more compliant with securities laws.

This is especially important as increasingly more real-world assets (RWAs) come on-chain.

In introducing a standardized approach to handling regulatory compliance in tokenized assets, ERC-3643 helps ensure that token issuers and operators can meet legal obligations while maintaining the benefits of utilising blockchains.

The ERC3643 Association

ERC-3643 is considered an important blockchain industry initiative. As a result, a number of organisations have got behind ERC-3643 to create the ERC3643 Association, a non-profit with the goal of providing governance and promotion of the standard.

The ERC3643 Association provides reference smart contract implementations of the standard and extensive documentation for projects and companies working with the standard.

Key Features of ERC-3643

ERC-3643 introduces a range of features that distinguish it from other token standards like ERC-20:

• Compliance-First Tokenization: ERC-3643 is built with regulatory compliance in mind, making it ideal for assets that need to adhere to legal frameworks. It ensures that only transactions will only be successful when they adhere to a token’s compliance rules.
• Identity Management: EIP-3643 tokens can only be transferred between addresses that have undergone identity verification. An identity registry is used to store details of verified identities. An on-chain identity is used by the registry which contains claims and credentials to verify the identity of participants.
• Authorized Issuers: A trusted issuers registry complements the identify registry. It is used to maintain details of who can issue claims about identities, such as KYC status and AML compliance.
• Token Deployer and Agent Roles: ERC-3643 includes roles such as the Deployer and the Agent. The Deployer manages token deployment for token owners, while the Agent is a more powerful user that manages deployers, the tokens and their fees.

ERC-3643 Implementation

A reference implementation of ERC-3643 is provided by the ERC-3643 Association in their GitHub repository.

A guide to the smart contracts that make up this implementation are provided in the ERC-3643 documentation portal.

Conclusion

ERC-3643 is an important step in bringing real-world assets onto the blockchain. It offers a way to create regulated tokens. This standard helps ensure compliance on decentralized networks.

The Chainlens Blockchain Explorer’s upcoming implementation will make it straightforward to view ERC-3643 compliant RWA tokens on a blockchain network. It will also be possible to monitor and manage these regulated tokens all from within Chainlens.

If you’re interested in learning more about using Chainlens with its ERC-3643 and RWAs support in your project, feel free to contact our team.