Every permissioned-token standard answers one question: how does a token refuse a transfer—and who controls the refusal? A plain ERC-20 cannot say no; a tokenized security must. Below are the three main answers—each explained first, then simulated live so you can play both sides.
How to use
- Each standard below gets a short description followed by a live sandbox: the left pane is the investor wallet (switch between Alice, Bob and Eve), the right pane is the issuer console. Every button works—state is simulated and resets on refresh.
- Run the numbered scenarios for a guided story: the same five situations play out in all three standards, so the differences stand out.
- Keep X-ray on to see the real on-chain calls behind every action—function names, revert strings and error codes match the actual specs and reference implementations. The switch appears in every block; it is one global setting.
ERC-3643: the compliance machine
ERC-3643—the T-REX protocol, authored by the Tokeny team—is the institutional heavyweight on EVM. Every transfer must pass two independent gates. The identity gate: each investor holds an on-chain identity contract (ONCHAINID) carrying KYC claims cryptographically signed by trusted issuers—the token knows people, not addresses. The compliance gate: a modular rule engine (country bans, balance caps, transfer limits) checked on every move.
On top of that, the issuer appoints agents with court-order-grade powers: freeze a wallet, freeze part of a balance, force a transfer, pause the whole token, and—the flagship feature—recover a lost wallet, because the token tracks the identity rather than the address.
Adoption: the ERC3643 Association claims $32B+ tokenized across 180+ jurisdictions; Fasanara runs its FAST money-market fund on the standard, DTCC joined the association in March 2025, and SEC Chair Paul Atkins named ERC-3643 in his July 2025 speech on digital finance. Pick it for institutional securities with real regulatory obligations—and accept the heavy contract suite as the cost.
ERC-1404: the pragmatic gate
The minimalist. Born in 2018 and never even merged as a formal EIP (it lives as ethereum/EIPs issue #1404), yet it powered SEC-registered tokens. It adds exactly two functions to ERC-20: before any transfer the token asks itself detectTransferRestriction(from, to, value)—a numeric code comes back (0 means go, anything else is a reason to refuse)—and messageForTransferRestriction(code) translates the code into human-readable text.
How the code is computed is entirely the issuer’s business; most implementations keep a plain whitelist of addresses. Freeze, forced transfers, recovery? Not in the standard—issuers bolt on their own custom code, and the sandbox below is honest about that.
Real users: ArCoin by Arca (the first SEC-registered ‘40 Act fund issuing shares on-chain), INX (the first SEC-registered token IPO, 2020), Centrifuge (ERC-1404 as its EVM token layer), and the Swiss CMTAT framework follows the same approach. Pick it when you need a restricted token fast, the compliance logic is simple, and you want minimum code to audit.
Token-2022: the construction kit
Not a compliance standard at all—a construction kit. Token-2022 is a separate Solana token program at a new address (not an upgrade of the classic SPL program): the issuer assembles a mint from extensions, fixed at creation. For RWA the big four are Default Account State = frozen (every new holder starts frozen; KYC is the issuer thawing you once), Transfer Hook (the issuer’s own program is invoked on every transfer and can veto it), Permanent Delegate (the issuer can move or burn tokens from any account—seizure and recovery), and Transfer Fees at the protocol level.
Verified on-chain: Paxos’ PYUSD and USDG carry permanent delegate + freeze authority—and deliberately skip default-frozen, so anyone can hold and compliance is reactive. Ondo launched 200+ tokenized US stocks and ETFs on Solana in January 2026 with transfer-hook eligibility enforcement; WisdomTree and Superstate run freeze/thaw setups. Pick it when you are on Solana and want protocol-level enforcement with custom rules living in your own hook program.
Side by side
The same story, three mechanics. The matrix sums up what each standard does natively, what is custom work, and who actually runs it in production—adoption figures per the RedStone Tokenization & RWA Standards Report 2026.
Sources
Function names, check order, revert strings and error codes were verified against primary sources (Aug 2026): EIP-3643 and the T-REX v4 source · the ERC-1404 spec, its reference implementation and the TokenSoft production token · the Token-2022 extensions docs and program source · adoption figures from the RedStone Tokenization & RWA Standards Report 2026.
Educational simulation—no real chain involved; state lives in the page and resets on refresh. Amounts, addresses, personas and the demo issuer’s own policies (whitelist, hook rules, the 1% fee) are illustrative.