Blockchain-based investment products and compliance tools are ready to be more than 10 times faster and cheaper than traditional finance (TRADFI), spurring the increased adoption of digital assets 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 financial industry that many people are not satisfied with, such as the identity verification of AML and KYC,” Chainlink co-founder Sergey Nazarov told Cointelegraph at the 2025 RWA summit in Cannes.
“If we compare it with the cost and how complicated it is to make compliant trading in the TradFi world, our industry should be 10 times faster and cheaper,” he said. “This is like a big cost issue for the Tradfi industry.”
Nazarov added that by solving this inefficiency, it would allow “many agencies to put capital on-chain.”
ChainLink launches an auto-compliance engine
On June 30th, ChainLink unveiled the Automated Compliance Engine (ACE), a modular and standardized framework for managing regulatory compliance across traditional and distributed finance (DEFI) protocols.
The ACE is in early access to certain institutions and ultimately aims to unlock $100 trillion worth of new capital to enter the blockchain economy, according to ChainLink.
Financial crime compliance between US and Canadian institutions will cost more than $60 billion in 2023, according to a research report from LexisNexis and Forrester Consulting.
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RWAs can be cheaper than traditional assets
Thanks to the efficiency of blockchain technology, investments in traditional assets such as stocks and commodities are cheaper due to actual assets (RWA) tokenization.
This could encourage more institutions to adopt RWA-based investments, Nazarov added:
“If compliance or identity costs or renewal and administrative costs are 5-10 times cheaper in blockchain formats and wrappers, that’s a huge advantage.”
ChainLink’s ACE framework can support the launch of a tokenized RWA with built-in compliance, reducing friction and costs for institutional investors entering the blockchain market.
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“This is intended to reduce friction and the costs of institutional capital, and we will do business on the blockchain,” Nazarov said.
According to data from RWA.xyz, Onchain RWAS recently hit a cumulative record high of over $25.4 billion across 318,000 total asset owners, excluding the value of Stablecoins.
https://www.youtube.com/watch?v=tyo993t72ms
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