Cryptographic firm Zama brings FHE privacy to T-REX Ledger
French cryptography startup Zama is integrating the protocol with ARC-3643 tokenized assets to add a layer of confidentiality, allowing standards developers to embed identity checks and transfer restrictions into tokenized ledgers.
In the year Zama, which has raised $73 million in Series A funding to commercialize fully homogenous encryption (FHE) by 2024, said the integration aims to make encryption a built-in asset infrastructure feature rather than an additional layer.
The integration is designed to enable institutions to use public blockchains without exposing sensitive positions and transaction data, which is limited by the adoption of public networks for controlled assets.
The announcement comes amid a broader industry debate over how institutions should handle privacy onchain, with zero-knowledge systems, permissioned networks and FHE all vying to be part of the token stack.
Related: T-REX Ledger Launches to Simplify Compliance with Tokenized Assets
Institutional users “shield” ERC-3643 positions
Zama founder Rand Hindy told Cointelegraph that institutions using T-REX can “hedge” existing positions by bundling ERC-3643 tokens into cryptic equivalents, encrypting future transfers and end-to-end encryption of the results, maintaining 1:1 balances.
Zama describes T-REX Ledger as an independent infrastructure layer built around ERC-3643, where identity and rules-based compliance are embedded in smart contracts and know-your-customer information remains off-chain, allowing issuers to keep information such as interest rates, withholding taxes, or clearing restrictions private on public networks.
Hindi said this could reduce the traditional “trade-off” between regulatory compliance and privacy by pushing towards a shared and programmable infrastructure rather than silos.
Competing privacy models are emerging.
The merger comes as infrastructure providers debate how institutions should handle privacy and interoperability across the chain.
Alex Gluchowski, CEO of Meter Labs, told Cointelegraph that zero-knowledge systems like zkSync's Prividium are the “only way” enterprises can achieve “true privacy and onchain interoperability,” especially when looking for private environments that can be deployed atomically via Ethereum and other ZK domains.
ZK proofs are designed to allow institutions to verify that transactions are valid without revealing the underlying data, tying security to Ethereum's base layer, he said.
Related: Moody's Brings Credit Ratings Onchain with Canton Network Integration
Shaul Kfir, co-founder of Digital Asset, argued that ZK is essential for most real-world assets and that Canton's permissioned architecture already combines privacy and interoperability without the need to authenticate every transaction.
Kfir insists that cryptographic guarantees “do not replace legal enforcement,” pointing to onchain hacks that show institutional systems still rely on legal frameworks to resolve disputes over user interests.
The voice of Zama FHA
Hindy posits FHE as complementary to both approaches, which he describes as a “common domain problem” that affects the ZK and Canton approaches by allowing networks to process encrypted data from multiple users instead of relying on data isolation or individual authentication.
This, he argued, allowed workflows such as secret, compliant decentralized financial primitives or public infrastructure controllers to implement daily access checks for a few seconds more encryption and decryption, but did not change the throughput or public chain integration under T-REX.
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