Chainlink, a decentralized blockchain oracle network, has launched a compliance framework aimed at unlocking over $100 trillion in institutional investor capital for the cryptocurrency sector.
This decentralized oracle network announced the release of its Automated Compliance Engine (ACE) on Monday. The system provides a modular and standardized framework for managing regulatory compliance in traditional finance and decentralized finance (DeFi) systems.
Chainlink stated that this new standard will allow for the creation of compliance-focused digital assets and services on public and private blockchain networks, including reusable digital identities, automated policy enforcement, cross-chain compliant digital asset settlement, and the use of regulated assets in DeFi.
The announcement mentioned that ACE is currently offering early access to specific institutions, aiming to unlock $100 trillion in new capital into the blockchain economy.
The standard is built on the Chainlink Runtime Environment and was launched in collaboration with market participants, including financial solutions provider Apex Group, the Global Legal Entity Identifier Foundation (GLEIF), and the ERC-3643 Association.
Existing compliance processes in traditional finance are often fragmented and costly, leading institutions to bear billions of dollars in costs.
According to a research report by LexisNexis and Forrester Consulting, the financial crime compliance costs for institutions in the U.S. and Canada exceeded $60 billion in 2023.
Chainlink stated that its privacy-preserving compliance framework integrates existing digital identity solutions, supporting on-chain and off-chain policy enforcement, enabling institutions to deploy digital assets in a compliant manner.
According to Chainlink co-founder Sergey Nazarov, ACE is designed to make digital asset compliance faster, cheaper, and more accurate.
"If you create a digital asset and use the Chainlink compliance standard within that digital asset, it will be better, cheaper, and faster than traditional alternatives," Nazarov stated, adding:
Previous solutions often relied on manual processes for risk monitoring and identity verification, which frequently led to duplicated efforts between counterparties due to a lack of transparency.
In contrast, Chainlink's architecture allows compliance logic to be reusable, upgradeable, and executable across any combination of token standards, which the company claims will reduce onboarding costs and operational complexity.
According to GLEIF CEO Alexandre Kech, Chainlink's compliance engine is "a powerful example of how verifiable organizational identity enhances compliance within the blockchain ecosystem."
"As the expectations for regulation in digital finance and traditional finance evolve, we encourage all financial institutions to explore how adopting vLEI can strengthen trust, interoperability, and auditability in their compliance frameworks with their solution providers," Kech stated.
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Original article: “Chainlink Launches Compliance Standard Targeting $100 Trillion in Institutional Cryptocurrency Capital”
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