The primary US clearinghouse for securities transactions has pledged to support Ethereum’s ERC-3643 standard, which pertains to permissioned securities tokens, as announced on March 20.
This organization is becoming a member of the ERC3643 Association, a nonprofit focused on fostering the adoption of this standard with the aim of “promoting and advancing the ERC3643 token standard,” according to their statement.
This endorsement reflects the growing acceptance of tokenization by US regulators, especially following a commitment from a former president to position the country as the “world’s crypto capital.”
Furthermore, it indicates that the Ethereum blockchain network could play a significant role in the landscape of US permissioned security tokens.
“By supporting institutional adoption at scale, this organization will help lead the future of tokenization,” said the president of the ERC3643 Association in a statement.
The clearinghouse operates under close supervision from the US Securities and Exchange Commission (SEC) and handles the majority of securities transactions in the country.
In 2023, the organization processed transactions totaling approximately $3 quadrillion, as reported in its annual review.
Also known as the T-REX Protocol, ERC-3643 is characterized as “an open-source suite of smart contracts that enables the issuance, management, and transfer of permissioned tokens […] even on permissionless blockchains,” as detailed on the ERC3643 Association’s website.
It employs a specially developed decentralized identity protocol to ensure that only individuals meeting certain criteria can hold tokens.
This clearinghouse has been proactive among US financial regulators in adopting blockchain technology, having tested various initiatives related to on-chain securities transactions. These trials include settling tokenized US Treasury Bills on the Canton Network and exploring private asset tokenization on an Avalanche (AVAX) subnet.
In February, the organization introduced ComposerX, a platform aimed at facilitating token creation and settlement for regulated US financial entities.
Moreover, in November, the Commodity Futures Trading Commission (CFTC) indicated its interest in exploring similar technologies for on-chain settlement within the derivatives market.