ERC-3643

ERC-3643

ERC-3643 is an Ethereum token standard for permissioned tokens, tokens that can only be held and transferred by addresses that have passed identity and eligibility checks. It's designed specifically for regulated and institutional assets, where the issuer needs to control who can own the token in order to comply with securities laws, KYC/AML requirements, and jurisdictional restrictions.

The mechanism works through an on-chain identity and compliance layer bound to the token. Before any transfer executes, the token checks whether the recipient is a verified, eligible holder according to the rules the issuer has configured. A transfer to a non-eligible address simply fails at the contract level. This is the fundamental difference from a standard ERC-20, which anyone can hold and transfer freely: ERC-3643 builds compliance into the token itself rather than relying on off-chain enforcement.

For tokenized real-world assets and institutional products, this permissioning is often a requirement rather than an option. A tokenized security that could be transferred to anyone, anywhere, would violate the very regulations that make it a legitimate instrument. ERC-3643 is one of the standards that makes compliant, permissioned tokenization possible on public infrastructure.

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