Analysis of ERC-3643 Token Standards, Compliance Features, and Application Scenarios

Written by: Beosin

In the process of integrating blockchain technology with traditional financial markets, Real World Assets (RWA) have become one of the most transformative areas of innovation. However, due to the lack of regulatory compliance frameworks and industry standards, the tokenization of real-world assets (RWA) has long faced developmental bottlenecks. Against this backdrop, the ERC-3643 standard has emerged as the first Ethereum token standard specifically designed for regulated assets.

Unlike the generic ERC-20 standard, ERC-3643 builds a technical architecture that complies with securities regulations while retaining the efficiency advantages of blockchain through embedded identity verification and an automated compliance engine, addressing the core contradiction of traditional financial assets on-chain. In this article, the Beosin security team will analyze the ERC-3643 token standard, compliance features, and application scenarios.

Analysis of ERC-3643 Token Standard

1. Token Standards

ERC-3643 addresses the core demand for compliant asset tokenization through a modular architecture. This decoupled design achieves the separation of business logic, granting the system a high degree of configurability. The most critical aspect is the separation of the identity registry from the compliance contract, allowing for flexible adjustments of compliance rules based on jurisdictional requirements without altering the core logic of the token. When a user initiates a transfer, the token contract automatically queries the compliance contract, which cross-references the identity claims in the identity registry, forming an automated compliance decision chain.

The technical architecture of ERC-3643 adopts a dual-level permission control, adding two critical compliance layers while inheriting the functionalities of ERC-20. The first layer focuses on the identity and qualification verification of the transaction recipient, utilizing the ERC-734/735 standards to verify the existence of identity claims and the certification status of trusted issuers; the second layer imposes global rules on the tokens themselves, such as setting daily transfer limits and caps on the number of holders. This layered design ensures continuous verification of investor qualifications while providing issuers with flexible regulatory enforcement tools, meeting the multidimensional compliance needs of security tokens. The core components of its architecture are as follows:

Identity Registry (: As the core module that connects on-chain addresses with on-chain identities (ONCHAINID), it ensures that the identities of all token holders are verifiable and compliant. Its core functions include registerIdentity ), updateIdentity (, updateCountry ), batchRegisterIdentity (, and isVerified ). The verification function isVerified ( triggers the Claim Topics Registry (to check claim types) and the Trusted Issuers Registry (to check claim issuers) when called, returning true if passed.

Compliance API: A dynamic compliance rules engine used to execute global compliance strategies (such as holder limits and cross-border restrictions), associated with token contracts to intercept illegal transactions in real-time. Its core functions include bindToken)(, unbindToken)(, transferred)(, created)(, destroyed)(, and canTransfer)(, supporting modular replacement of compliance logic, allowing issuers to dynamically upgrade rules (such as adding AML strategies) without affecting the token contract.

Trusted Issuers Registry ): Used to manage credible entities authorized to issue statements.

Token Contract: Expanded compliance control features based on ERC-20 compatibility, with main functions including conditional transfers, token freezing and unfreezing, contract lifecycle management, and token metadata management.

Claim Topics Registry (: Defines the types of declarations required for tokens (such as KYC levels, investor qualifications) as a "checklist" for verification.

2. Identity Verification and Compliance Execution Mechanism

The identity verification mechanism requires that each token holder must complete identity verification through a trusted statement issuer in order to be included in the whitelist of the identity registry. When a transfer occurs, the token contract calls the isVerified)( function through the compliance contract before the transfer to check in real-time whether the recipient's address is in the identity registry, and whether its associated identity contract contains the declarations required in the statement subject registry, which must be signed by the authorized parties in the trusted issuer registry. This process ensures that only qualified investors who have passed KYC/AML checks can hold or receive security tokens.

The compliance execution is implemented through the canTransfer)( function, which is called before each transfer to perform the following key checks:

Investor qualification matching: Verify whether the recipient meets the investor requirements for a specific asset class ) such as qualified investor status (

Jurisdictional Restrictions: Ensure that the jurisdiction where both parties are located allows such transactions.

Holding Limit Control: Check whether the transfer will cause a single investor to exceed the holding limit.

Global rules compliance: Verify whether it meets other global rules set by the issuer or regulatory authorities.

This design embeds compliance requirements directly into the token's contract, transforming regulatory rules into automatically executed on-chain controls. These rules are dynamically upgradable, allowing for compliance contract updates without modifying the token contract itself, to adapt to the continuously improving compliance framework.

Taking the stablecoin regulatory system implemented by the Hong Kong Monetary Authority )HKMA( starting in August 2025 as an example, ERC-3643 can meet the regulatory requirements of the following regulations:

i) Identity verification for stablecoin holders

Regulatory Guidelines for Licensed Stablecoin Issuers, Article 6.5.3: Licensees should identify all operations related to each designated stablecoin throughout its entire token lifecycle, which should include deployment, configuration, minting, burning, upgrading, pausing, resuming, blacklisting, unblacklisting, freezing, unfreezing, whitelisting, and the use of any operational wallets, etc.

Section 5.11 of the "Guidelines on Combating Money Laundering and Terrorist Financing": Unless the licensee can demonstrate to the Monetary Authority and satisfy it that the risk mitigation measures can effectively prevent and combat money laundering, terrorist financing activities, and other crimes, the identity of each stablecoin holder should be verified by one of the following parties: the licensee ) even if there is no client relationship between the holder and the licensee (; a properly regulated financial institution or virtual asset service provider; or a reliable third party.

The above two guidelines require stablecoin licensees to verify the identity of stablecoin holders and manage the permissions for all operations during the token lifecycle. ERC-3643 supports binding each stablecoin holder's wallet address to an on-chain identity declaration (such as KYC status, residence) and verifies it in real-time through the Compliance contract.

ii) Transaction Control and Real-time Screening

Guidelines for Combating Money Laundering and Terrorist Financing, Section 5.10: Licensees may implement different measures to prevent the risk of stablecoins being used for illegal activities. Examples of such measures include:

)a( adopt appropriate technological solutions) such as blockchain analysis tools( to continuously screen stablecoin transactions and related wallet addresses beyond the initial distribution scope;

)b( will be flagged and blacklisted as a wallet address associated with sanctions or illegal activities;

And Article 6.36: )a( adopts a risk-based approach to monitor stablecoin transfers with counterparties...; and )b( to regularly and/or upon the occurrence of trigger events, be aware of any greater risks of money laundering and terrorist financing ) review information obtained under the due diligence measures for stablecoin transfer counterparties as per paragraph 6.33...

The Compliance contract of ERC-3643 supports custom trading rules (for example, only allowing transfers between KYC addresses) and dynamically updates the whitelist and blacklist. If the recipient has not passed KYC or is on the blacklist, the transaction is automatically terminated.

For addresses receiving funds through cross-chain or currency exchange transactions, Beosin KYT supports the identification of over 120 cross-chain protocols and currency exchange protocols, providing a professional API integration solution to enhance the risk assessment capabilities of ERC-3643 for transaction addresses across the entire blockchain.

Conclusion

The core competitiveness of ERC-3643 lies in directly encoding regulatory requirements into the token protocol layer, providing a secure bridge for traditional finance to enter the blockchain world. This design addresses the compliance issues that traditional financial institutions are most concerned about, including investor certification, jurisdictional restrictions, and transaction monitoring. On an operational level, ERC-3643 offers regulators unprecedented transparent supervision capabilities. All identity verification records and compliance decisions are stored on-chain in a verifiable manner, allowing regulators direct access without relying on post-reporting by issuers. This transparency not only reduces regulatory costs but also enhances market integrity, laying the foundation for tokenized assets to gain mainstream recognition.