In a new video, Chainlink co-founder Sergey Nazarov distilled how the Chainlink Automated Compliance Engine (ACE) solves the problem of identity and compliance for blockchain transactions, unlocking a competitive advantage for tokenized financial products.
Launched with leading market participants Apex Group, GLEIF, and the ERC-3643 Association, ACE is a unified standard for creating compliance-focused digital assets and services across public and private blockchains. Its modular, privacy-preserving framework integrates existing identity systems with onchain infrastructure to support policy enforcement and lay the groundwork for over $100 trillion in institutional capital to enter the onchain economy.
Protecting user identity is a primary issue preventing institutional blockchain adoption. An imperfect solution is the use of individual private chains.
“The better solution is actually a set of standards for how identity and compliance policies work on thousands of different chains, which is what the automated compliance standard from Chainlink is about,” Nazarov explained.
“For the first time, you have a cohesive system with an identity component, a policy management component, and the ability to meet all the requirements of institutions so that the institutions can transact with each other onchain.”
Built on the Chainlink Runtime Environment (CRE), ACE’s architecture enables compliance logic to be reusable, upgradeable, and enforceable across any combination of token standards, execution environments, or legal jurisdictions. This significantly reduces onboarding costs and operational complexity while enhancing compliance, reliability, and scalability for regulated onchain finance.
Ultimately, Nazarov believes ACE paves the way for compliance to become a feature of the blockchain industry by powering tokenized real-world assets (RWAs) that function as superior financial products.
“You basically arrive at a world where the TradFi onboarding process is one to two to three months and the DeFi, RWA onboarding process is one to two to three seconds, because you can instantly verify the compliance of a transaction,” he explained.
“That’s really what we’re going towards with the automated compliance standard is the ability to use blockchains and smart contracts as a better method of compliance.”
Watch the full video.