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What is a Security Token? (ERC-3643 Explained)

A security token is a digital token that represents a regulated financial instrument, such as equity, debt, or a share in a fund. Unlike a simple cryptocurrency, a security token is designed to comply with securities regulation, which means it must control who can hold and transfer it.

The role of ERC-3643

ERC-3643 is a token standard built specifically for compliant security tokens. It enforces transfer restrictions at the smart-contract level, so tokens can only move to wallets that have passed KYC and meet eligibility requirements. This makes compliance a property of the token itself rather than something checked separately.

Why this matters for institutions

For regulated institutions, compliance cannot be optional or bolted on. Embedding it at the token level reduces operational risk and makes tokenized securities viable at institutional scale. ERC-3643 has become a widely adopted standard, with billions in assets issued under it across many deployments.

How SUPERBLOCK uses it

SUPERBLOCK's Tokenisation Engine issues security tokens using ERC-3643, with identity and eligibility handled by SBX ID. This is the foundation of the SBX Prime platform.

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