Chainlink co founder Sergey Nazarov has publicly stated that blockchain powered compliance solutions could reduce transaction costs and procedures in traditional finance by a factor of ten. In an interview, Nazarov emphasized that current KYC and AML processes in global finance are “inefficient and fragmented,” burdened by decades old procedures that inflate costs for institutions.
Nazarov points to Chainlink’s newly launched Automated Compliance Engine, which integrates identity validation, real time transaction monitoring, and re usable attestations deployed in programmable smart contracts. This system can automate compliance workflows, reduce manual overhead, and dramatically shorten settlement timelines across jurisdictions.
According to public data, global financial crime compliance cost banks over $60 billion in 2023 alone. By comparison, smart contracts running pre approved checks could streamline reporting and cut labor costs. Institutional investors are already participating in pilot programs that use tokenized securities and real world assets, leveraging ACE for compliant issuance and automated audits.
Nazarov’s comments come amid growing institutional interest in blockchains capable of regulatory compliance, especially as tokenization gains traction. His view: efficient on chain compliance could serve as a gateway for trillions in capital flow into blockchain ecosystems.
