French crypto startup Zama is integrating its protocol with Apex-backed T-REX Ledger to add a layer of confidentiality for tokenized assets based on ERC-3643, a standard that allows issuers to embed identity controls and transfer restrictions in tokenized securities.
Zama, which raised $73 million in Series A funding in 2024 to commercialize full homomorphic encryption (FHE), said the integration aims to make confidentiality a built-in feature of tokenized asset infrastructure rather than an additional layer.
The integration aims to enable institutions to exploit public blockchains without exposing sensitive items and transaction data, which limits the exploit of public networks for regulated assets.
The announcement comes amid a broader industry debate about how institutions should deal with on-chain privacy, with zero-knowledge systems, permissioned networks and FHEs competing to become part of the tokenization stack.
Related: T-REX Ledger is introduced to facilitate compliance with tokenized assets
Institutional users “shield” ERC‑3643 seats
Zama founder Rand Hindi told Cointelegraph that institutions using T-REX will be able to “shield” existing positions by wrapping ERC-3643 tokens in confidential equivalents, preserving 1:1 balances while encrypting future transfers and resulting balances end-to-end.
Zama described T-REX Ledger as a neutral infrastructure layer built on top of ERC-3643, where identity- and policy-based compliance is embedded in shrewd contracts and Know Your Customer underlying data remains off-chain, enabling issuers to keep parameters such as interest rates, withholding taxes or liquidation thresholds confidential on public networks.
Hindi said this could reduce the time-honored “trade-off” between regulatory compliance and confidentiality by placing both on a common, programmable infrastructure rather than in separate silos.
Competing privacy models are emerging
The integration comes as infrastructure providers debate how institutions should treat online privacy and interoperability.
Matter Labs CEO Alex Gluchowski told Cointelegraph that zero-knowledge systems like zkSync’s Prividium are “the only way” by which enterprises can “achieve true privacy and interoperability on the network,” especially when they want private environments that can still run atomically via Ethereum and other ZK domains.
He said ZK proofs are designed to allow institutions to prove the validity of transactions without revealing the source data, while anchoring security in Ethereum’s underlying layer.
Related: Moody’s makes credit ratings available online through integration with Canton Network
Digital Asset co-founder Shaul Kfir denied that ZK is necessary for most real-world assets and said Canton’s permissioned architecture already combines privacy and interoperability without requiring every participant to check every transaction.
Kfir insisted that cryptographic guarantees cannot “replace legal enforceability,” pointing to onchain hacks as evidence that institutional systems still rely on legal frameworks to resolve disputes over user intent.
Zama pitch at FHE
The Hindu positioned FHE as a complement to both approaches, saying it solves what it described as the “shared state problem” affecting both the ZK and Canton approaches by allowing networks to perform computations on encrypted data from multiple users, rather than relying on data isolation or individual proofs.
He said this enabled the implementation of workflows such as confidential, standards-compliant, decentralized finance solutions or daily threshold checks for public infrastructure regulators, with a few seconds of additional latency for encryption and decryption, but without changing T-REX’s underlying bandwidth or public chaining capabilities.
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