Blockchain-based investment products and compliance tools are poised to become more than 10 times faster and cheaper than traditional finance (TradFi) offerings, spurring increased digital asset adoption by financial institutions.
Traditional financial compliance products are often fragmented and expensive due to complex manual processes, resulting in billions of dollars in costs.
“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.
“If you compare what it costs and how complicated it is to make a compliant transaction in the TradFi world, our industry should be able to do it 10 times faster and cheaper,” he said. “It’s like a huge cost problem for the TradFi industry.”
Nazarov added that solving this inefficiency could “unblock a bunch of institutions from being able to put capital onchain.”
Chainlink launches Automated Compliance Engine
On June 30, Chainlink revealed its Automated Compliance Engine (ACE), a modular and standardized framework for managing regulatory compliance across traditional and decentralized finance (DeFi) protocols.
ACE is in early access for select institutions and ultimately aims to unlock $100 trillion worth of new capital to enter the blockchain economy, according to Chainlink.
Financial crime compliance for institutions in the US and Canada cost upward of $60 billion in 2023, according to a research report by LexisNexis and Forrester Consulting.
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RWAs could become cheaper than traditional assets
Thanks to the efficiencies of blockchain technology, investing in traditional assets such as equities and commodities will become cheaper through real-world asset (RWA) tokenization.
This may prompt more institutions to adopt RWA-based investments, Nazarov said, adding:
“If the compliance or the identity costs or the compliance of renewal and management costs in the blockchain format and wrapper are five to 10x cheaper, then that’s a huge advantage.”
Chainlink’s ACE framework supports launching tokenized RWAs with built-in compliance, potentially lowering the friction and cost for institutional investors entering blockchain markets.
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“It’s meant to reduce the friction and the cost of institutional capital doing transactions on blockchains,” Nazarov said.
Onchain RWAs recently reached a cumulative all-time high of over $25.4 billion across 318,000 total asset holders, excluding the value of stablecoins, according to data from RWA.xyz.
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