Blockchain-based investment products and compliance tools are set to become over ten times faster and more cost-effective than those in traditional finance (TradFi), potentially accelerating digital asset adoption among financial institutions.
In TradFi, compliance processes are often disjointed and costly, relying heavily on manual procedures. This inefficiency results in billions of dollars in expenses for institutions each year.
“Compliance is one of the most inefficient aspects of traditional finance, particularly when it comes to identity verification, AML, and KYC,” Chainlink co-founder Sergey Nazarov said in an interview with Cointelegraph at the RWA Summit 2025 in Cannes.
“Compared to the complexity and cost of executing a compliant transaction in TradFi, our industry should be able to achieve the same results ten times faster and cheaper,” Nazarov explained. “It’s a massive cost burden for traditional finance.”
He added that addressing these inefficiencies could remove major barriers, enabling more institutions to move capital onchain.
Chainlink Unveils Automated Compliance Engine
On June 30, Chainlink introduced its Automated Compliance Engine (ACE), a modular and standardized system designed to streamline regulatory compliance across both traditional finance and decentralized finance (DeFi) protocols.
Currently available in early access to select institutions, ACE is aimed at unlocking up to $100 trillion in new capital for the blockchain ecosystem, 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.
RWAs May Soon Be More Cost-Efficient Than Traditional Assets
Blockchain technology is making it possible to invest in traditional assets like equities and commodities at a lower cost through real-world asset (RWA) tokenization.
This increased efficiency could drive a growing number of institutions to embrace RWA-based investments, said Nazarov, who added:
“If the compliance or the identity costs or the compliance of renewal and management costs in the blockchain format and wrapper are 5 to 10x cheaper, then that’s a huge advantage.”
Chainlink’s ACE framework enables the launch of tokenized real-world assets (RWAs) with integrated compliance features, potentially reducing both the friction and costs for institutional investors entering blockchain markets.
“It’s meant to reduce the friction and the cost of institutional capital doing transactions on blockchains,” Nazarov said.
According to data from RWA.xyz, onchain real-world assets (RWAs) have reached a cumulative all-time high of over $25.4 billion, spread across 318,000 total asset holders—excluding the value of stablecoins.
