Permissioned Tokens and ERC-3643: How RWA Tokens Enforce the Rules

Ordinary crypto tokens can be sent to any address. Tokenized securities can’t, because the law limits who may hold them. Permissioned tokens build those limits into the token contract.

How permissioned tokens work

1. Investors are verified off-chain by the issuer or its transfer agent.
2. Approved wallets are recorded onchain, either as an allowlist or as identity credentials attached to the wallet.
3. Every transfer is checked: if the receiving wallet isn’t approved, or the transfer breaks a rule (country limits, holding periods, maximum investors), the transaction fails.
4. The issuer keeps admin powers: freezing wallets, forcing transfers and recovering tokens.

ERC-3643

ERC-3643, first developed by Tokeny as the T-REX protocol, is the most widely used open standard for this on Ethereum-compatible chains. It separates:

• Identity: each investor has an onchain identity holding claims (such as “passed KYC” or “accredited investor”) signed by trusted verifiers.
• Compliance rules: a module that encodes limits such as allowed countries or maximum holders.
• The token: which checks identity and compliance on every transfer.

Other approaches include simple allowlists in a custom contract, and Solana’s token extensions with transfer hooks.

Why it matters for holders

• You can only send tokens to approved wallets, so you can’t freely use them in every DeFi app.
• The issuer can freeze or move your tokens. That protects against theft and errors, but it is also a central point of control.
• Permissioned tokens can still be used in DeFi when the protocol’s contracts are themselves approved holders.

See the risk guide for how this fits with the other risks of tokenized assets.