On-Chain Compliance Takes Center Stage in Regulated Industries

The concept of on-chain compliance refers to the technical controls that enforce regulatory requirements directly inside blockchain-based workflows. This approach automates and proves regulatory compliance, replacing traditional policy documents and PDFs with code.

On-chain compliance spans four layers: eligibility controls, transfer rules, monitoring and reporting, and identity data exchange. These layers ensure that only authorized entities can hold or transact assets, and that transactions are monitored and documented over time.

The use of permissioned tokens is a key aspect of on-chain compliance. These tokens enforce rules by checking the eligibility of recipients every time a transfer occurs. Typical capabilities in permissioned token stacks include identity gating, transfer restrictions, and administrative controls.