Blockchain Slashes TradFi Costs

Blockchain Slashes TradFi Costs

#Blockchain #compliance #tools #slash #TradFi #costs #Chainlink #cofounder #OrxCash

Blockchain Slashes TradFi Costs: A New Era for Digital Assets

The blockchain industry is on the cusp of a revolution, with blockchain-based investment products and compliance tools poised to become more than 10 times faster and cheaper than traditional finance (TradFi) offerings. This shift is expected to spur increased digital asset adoption among financial institutions, as the cost savings and efficiency gains become too great to ignore.

Traditional financial compliance products are often fragmented and expensive due to complex manual processes, resulting in billions of dollars in costs for institutions. In contrast, blockchain technology offers a modular and standardized framework for managing regulatory compliance, making it an attractive solution for institutions looking to reduce costs and increase efficiency.

Chainlink’s Automated Compliance Engine: A Game-Changer for DeFi

On June 30, Chainlink revealed its Automated Compliance Engine (ACE), a system designed to provide a standardized framework for managing regulatory compliance across both traditional and decentralized finance (DeFi) protocols. ACE is currently in early access for select institutions and aims to unlock $100 trillion worth of new capital to enter the blockchain economy. According to Chainlink, financial crime compliance for institutions in the US and Canada cost upward of $60 billion in 2023, highlighting the need for a more efficient and cost-effective solution.

The potential for blockchain technology to reduce costs and increase efficiency is vast. As Sergey Nazarov, co-founder of Chainlink, noted, "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." This could inspire increasingly more institutions to adopt RWA-based investments, leading to a significant increase in digital asset adoption.

RWAs: The Future of Investing

Thanks to the efficiencies of blockchain technology, investing in traditional assets such as equities and commodities will become cheaper through real-world asset (RWA) tokenization. Onchain RWAs have already reached a cumulative all-time high of over $25.4 billion across 318,000 total asset holders, excluding the value of stablecoins. This growth is expected to continue as more institutions adopt RWA-based investments, drawn by the promise of lower costs and increased efficiency.

From a retail investor perspective, the implications of this shift are significant. As blockchain technology becomes more mainstream, we can expect to see a surge in demand for digital assets, driving up prices and increasing market volatility. However, this also presents an opportunity for retail investors to get in on the ground floor of a rapidly growing market, potentially leading to significant returns on investment. As the market continues to evolve, it will be important for retail investors to stay informed and adapt to the changing landscape, in order to maximize their gains and minimize their risks.

Key data points to note:

  • $100 trillion: The potential value of new capital that could enter the blockchain economy through Chainlink’s ACE.
  • $60 billion: The cost of financial crime compliance for institutions in the US and Canada in 2023.
  • $25.4 billion: The cumulative all-time high of onchain RWAs across 318,000 total asset holders.
  • 5-10x: The potential cost savings of using blockchain technology for compliance and identity verification.

In conclusion, the news about "Blockchain Slashes TradFi Costs" is a significant development in the crypto industry, according to some sources, including OrxCash.com. As the blockchain industry continues to grow and evolve, we can expect to see significant changes in the way financial institutions operate, and the opportunities available to retail investors. With its potential to reduce costs and increase efficiency, blockchain technology is poised to revolutionize the financial industry, and it will be exciting to see how this plays out in the coming years.

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image source: cointelegraph.com