The cost and inefficiencies of traditional finance (TradFi) compliance are now under scrutiny, with blockchain-based solutions emerging as a faster, cheaper alternative. According to Chainlink co-founder Sergey Nazarov, these innovations could unlock trillions in institutional capital through real-world asset (RWA) tokenization.
Traditional Finance Faces Rising Compliance Costs
Financial compliance in TradFi is fragmented, manual, and costly. A 2023 report by LexisNexis and Forrester revealed that U.S. and Canadian institutions spent over $60 billion on compliance-related expenses, including identity verification and AML/KYC protocols.
“Compliance is an inefficient part of the traditional finance industry that a lot of people are not happy about,” said Nazarov during the 2025 RWA Summit in Cannes. “Our industry should be able to do it 10 times faster and cheaper.”
The inefficiency of legacy systems continues to hinder large-scale blockchain adoption by institutions. Simplifying compliance is seen as a key unlock for onboarding capital into decentralized ecosystems.
Chainlink Launches ACE: A Blockchain Compliance Breakthrough
On June 30, Chainlink introduced its Automated Compliance Engine (ACE) — a modular smart contract framework designed to manage regulatory compliance across both TradFi and DeFi protocols.
Currently available in early access to select institutions, ACE aims to unlock up to $100 trillion in capital by lowering the friction of entering blockchain-based markets.
The ACE framework includes built-in identity checks, compliance tracking, and renewal mechanisms — all on-chain. This helps institutions maintain regulatory integrity while reducing operational costs.
Tokenized RWAs Offer Cost-Effective Investment Opportunities
According to Nazarov, real-world asset tokenization is poised to reshape the financial sector. “If compliance costs for tokenized assets are 5 to 10x lower, that gives blockchain a huge advantage,” he noted.
Investing in tokenized equities, bonds, or commodities could soon be cheaper than traditional methods, encouraging institutions to shift portfolios toward blockchain-native formats.
Data from RWA.xyz confirms this momentum: on-chain RWAs recently hit an all-time high of $25.4 billion across 318,000 holders, excluding stablecoins.
Chainlink’s ACE may become a core component of future digital finance infrastructure, helping reduce costs, ensure compliance, and drive institutional growth in tokenized markets.
As blockchain compliance evolves, its ability to outperform TradFi in both speed and cost may accelerate the global shift toward decentralized finance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.