Crypto adoption by enterprises is increasing rapidly. It has the potential to create a stronger and bigger network. In fact, after the initial coin offering bubble, which inflated in 2017, many blockchain commentators and entrepreneurs believe that it could be a solution for most of the businesses and industries in order to solve the existing problems. Many enterprises such as Maersk-led Trade-ins or IBMs Food Trust have employed blockchain technology. The experts believe that problems such as cryptocurrency volatility or scalability was the issue that many businesses still don’t use blockchain and cryptocurrency. They also believe that on-chain KYC gives a new life into enterprise blockchain.
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Crypto industry compliance is not suitable
As we mentioned above, the cryptocurrency world is evolving. As a result, the demand is increasing for crypto to have interaction with traditional market. For this reason, many wallet providers and exchanges has “Know Your Customer” procedure. The KYC is mandatory, especially when users want to transact in high volume. The problem here is that the pre-compliance checks are enforced only on a superficial level. But, it has to be throughout the network as a whole in order to be efficient. However, there are some actors who skip KYC checks and start transacting on the network. So, it shows that not all the crypto users have to go under KYC procedure.
The reality is that enterprise adoption is crucial for blockchain in order to realize its true potential. Consequently, there should be a solution that unites the requirement for compliance with the technology itself.
on-chain KYC gives a new life into enterprise blockchain; Network-enforced compliance
There is no solution, which could fit all the users in different countries. But, it’s possible to adapt the solution based on the requirements and regulations in different jurisdictions. As a result, an enterprise is able to provide immutable and trustless proof to the authorities in order to show the necessary KYC check for the involved parties to their transactions.
The benefits of this solution are something beyond pure compliance. A project, which is issuing pre-compliant tokens also would be able to define business rules for transaction fees. Those transaction fees also enforced by the consensus layer and can be adapted related to needs.