Blockchain technology promises to significantly improve the efficiency of regulatory compliance for financial institutions, reducing costs and accelerating processes.
Impact of Blockchain on Financial Compliance
Chainlink co-founder Sergey Nazarov stated at the RWA Summit 2025 in Cannes that blockchain-based compliance tools could be ten times faster and cheaper than traditional financial solutions. He noted that addressing inefficiencies could 'unblock a number of institutions from being able to put capital on chain.'
Challenges of Traditional Compliance
Traditional compliance products cost financial institutions billions due to complex manual processes and fragmented systems. Research indicates compliance costs for financial crime amount to over $60 billion annually in the U.S. and Canada alone.
Future of Institutional Investments through Asset Tokenization
Interest in tokenizing traditional financial products is rising. Nazarov emphasized that investing in traditional assets through tokenization will become cheaper due to blockchain efficiencies. 'If compliance or identity management costs in blockchain format are 5-10 times lower, that's a huge advantage.'
The integration of blockchain technology into the compliance process could fundamentally change how financial institutions approach investments and regulatory adherence, opening new opportunities for capital entry into the market.
