Blockchain-based tools promise significant cost reductions and speed improvements compared to traditional financial products, leading to greater digital asset adoption.
Challenges of Traditional Financial Compliance
Traditional financial compliance products are often fragmented and costly due to complex manual processes, resulting in billions of dollars in costs for institutions.
"Compliance is an inefficient part of the traditional finance industry that a lot of people are not happy about, including identity verification of AML and KYC," Chainlink co-founder Sergey Nazarov told Cointelegraph during the RWA Summit 2025 in Cannes.
Launch of Chainlink's Automated Compliance Engine
On June 30, Chainlink revealed its Automated Compliance Engine (ACE), a system providing a modular and standardized framework for managing regulatory compliance across both traditional and decentralized finance protocols. ACE is in early access for select institutions and aims to unlock $100 trillion in new capital to enter the blockchain economy.
"It’s meant to reduce the friction and the cost of institutional capital doing transactions on blockchains," Nazarov added.
Potential of Real-World Asset Tokenization
Thanks to blockchain efficiencies, investing in traditional assets such as equities and commodities will become cheaper through real-world asset (RWA) tokenization. This could inspire more institutions to adopt RWA-based investments. Nazarov emphasized that if compliance costs are 5 to 10x cheaper in blockchain formats, it represents a substantial advantage.
The development of tools that enhance financial compliance efficiency could significantly alter the landscape for traditional financial institutions and lead to greater integration of digital assets.
