Zama taps Apex-backed T‑REX to bring bank‑grade privacy to public blockchains

French cryptography startup Zama is integrating its protocol with Apex-backed T-REX Ledger to become what it calls the “default confidentiality layer” for ERC-3643 tokenized assets, a standard that lets issuers embed identity checks and transfer restrictions into tokenized securities.

According to a Tuesday release shared with Cointelegraph, Zama, which raised $73 million in Series A funding in 2024 to commercialize fully homomorphic encryption (FHE), and T-REX Network aim to establish privacy as a core infrastructure for institutional tokenization, “rather than a standalone feature.” 

The integration, they say, will enable regulated institutions to use public blockchain ecosystems “without compromising operational security or market integrity,” a sticking point that has prevented many institutions from putting sensitive positions and trading strategies on public rails.

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. 

Institutional users “shield” ERC‑3643 positions

Zama says T-REX Ledger functions as a neutral layer-2 built around ERC-3643, where identity and rules-based compliance sit in smart contracts, and underlying Know Your Customer (KYC) data stays off-chain, enabling issuers to keep parameters such as interest rates, withholding taxes, or liquidation thresholds confidential on public rails. 

Hindi argued that this removed the traditional “trade off” between regulatory compliance and confidentiality by pushing both into shared, programmable infrastructure rather than separate silos.

ZK and Canton’s competing visions

The integration comes amid a broader debate over how to bring institutional-grade 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 (ETH) 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.

Digital Asset co-founder Shaul Kfir disputed that ZK was necessary for most real-world assets (RWAs) and argued that Canton Network, which uses a permissioned architecture, already combined privacy and interoperability by abandoning the assumption that “everyone in the world” must 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, claiming it solved the “shared state problem that limits both ZK and Canton” by allowing the network to run shared computations over encrypted data from many users at once, instead of hiding data by not sharing it or relying on each user to prove their own state.

That, he argued, made it possible to implement workflows such as confidential, compliant decentralized finance (DeFi) 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.