Cryptography Firm Zama Brings FHE Privacy to T‑REX Ledger

French cryptography startup Zama is integrating its protocol with Apex-backed T-REX Ledger to add a confidentiality layer for ERC-3643-based tokenized assets, a standard that lets issuers embed identity checks and transfer restrictions into tokenized securities.

Zama, which raised $73 million in Series A funding in 2024 to commercialize fully homomorphic encryption (FHE), said the integration is intended to make confidentiality a built-in feature of tokenized asset infrastructure rather than an added layer.

The integration is designed to allow institutions to use public blockchains without exposing sensitive positions and transaction data, an issue that has limited adoption of public networks for regulated 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 competing to become part of the tokenization stack.

Related: T-REX Ledger launches to ease compliance for tokenized assets

Institutional users “shield” ERC‑3643 positions

Zama founder Rand Hindi told Cointelegraph that institutions using T-REX would be able to “shield” existing positions by wrapping ERC-3643 tokens into confidential equivalents, preserving balances 1:1 while encrypting future transfers and resulting balances end-to-end. 

Zama described T-REX Ledger as a neutral infrastructure layer built around ERC-3643, where identity and rules-based compliance sit in smart contracts and underlying Know Your Customer data stays offchain, allowing issuers to keep parameters such as interest rates, withholding taxes or liquidation thresholds confidential on public networks.

Hindi said this could reduce the traditional “trade-off” between regulatory compliance and confidentiality by pushing both into shared, programmable infrastructure rather than separate silos.

Competing privacy models are emerging

The integration comes as infrastructure providers debate how institutions should handle privacy and interoperability onchain.

Matter Labs CEO Alex Gluchowski told Cointelegraph that zero-knowledge systems like zkSync’s Prividium were “the only way” that enterprises could “achieve real privacy and onchain interoperability,” particularly when they want private environments that can still settle atomically via Ethereum and other ZK domains.

He said that ZK proofs were designed to let institutions prove transactions were valid without revealing the underlying data, while anchoring security to Ethereum’s base layer.

Related: Moody’s brings credit ratings onchain with Canton Network integration

Digital Asset co-founder Shaul Kfir disputed that ZK was necessary for most real-world assets and said Canton’s permissioned architecture already combined privacy and interoperability without requiring every participant to validate every transaction.

Kfir insisted that cryptographic guarantees could not “substitute for legal enforceability,” pointing to onchain hacks as evidence that institutional systems still relied on legal frameworks to resolve disputes over user intent.

Zama’s FHE pitch

Hindi positioned FHE as complementary to both approaches, saying it addresses what he described as a “shared state problem” affecting both ZK and Canton approaches by allowing networks to run computations on encrypted data from multiple users, rather than relying on data isolation or individual proofs.

That, he argued, made it possible to implement workflows such as confidential, compliant decentralized finance primitives or daily threshold checks for regulators on public infrastructure, with a few seconds of extra latency for encryption and decryption, but no change to T-REX’s underlying throughput or public-chain composability.

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