Chainlink’s Nazarov says institutions are turning to blockchain tools and tokenized RWAs to outpace TradFi in speed and cost by 10x
Financial institutions are increasingly adopting digital assets due to the potential for blockchain-based investment products and compliance tools to outperform traditional finance (TradFi) services in speed and cost by more than ten times.
Due to intricate manual procedures, traditional financial compliance products are frequently disjointed and costly, costing billions of dollars.
During the RWA Summit 2025 in Cannes, Chainlink co-founder Sergey Nazarov told Cointelegraph, “Many people are unhappy about compliance, which includes identity verification of AML and KYC.
It is an inefficient part of the traditional finance industry.”
“Our industry should be able to do it ten times faster and cheaper if you compare the costs and complexity of making a compliant transaction in the TradFi world,” he stated.
“It’s a major financial issue for the TradFi sector.”
Fixing this inefficiency might “unblock a bunch of institutions from being able to put capital onchain,” Nazarov continued.
Chainlink Launches Automated Compliance Engine
The Automated Compliance Engine (ACE), a standardized and modular platform for managing regulatory compliance across traditional and decentralized finance (DeFi) protocols, was unveiled by Chainlink on June 30.
According to Chainlink, ACE is in early access for a few chosen institutions and eventually seeks to open up $100 trillion in fresh funding for the blockchain economy.
A study by LexisNexis and Forrester Consulting estimates that 2023 financial crime compliance will cost US and Canadian institutions up to $60 billion.
RWAs Are Less Expensive Than Conventional Assets
Through real-world asset (RWA) tokenization, investing in conventional assets like stocks and commodities would become more affordable due to the efficiency of blockchain technology.
According to Nazarov, this could encourage further institutions to embrace RWA-based investments.
“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.”
With its built-in compliance, Chainlink’s ACE framework facilitates the establishment of tokenized RWAs, which might reduce the cost and difficulty for institutional investors looking to access blockchain markets.
According to Nazarov, the goal is to lower the cost and friction associated with institutional capital doing transactions on blockchains.
According to data from RWA.xyz, onchain RWAs recently hit a cumulative all-time high of over $25.4 billion across 318,000 total asset holders, excluding the value of stablecoins.