The cryptocurrency and decentralized finance industries have matured rapidly within the last few years. As a result, they are bumping up against the inevitable regulations that would bring them into the mainstream.
While entities like Coinbase and Kraken have already embraced “Know-Your-Customer” (KYC) processes, DeFi systems continue to pose a challenge for regulators because they are designed to allow users to remain anonymous.
As a recent CoinDesk article put it: “Trying to regulate DeFi is a bit like trying to parent a super-powered 14-year-old who can fly, teleport and turn invisible at will.”
Yet an increasing number of industry experts believe that “KYC can help to make a trustless industry trustable.”
Enter the CRD Network, which is launching a Chainlink node to bring its compliance data to DeFi applications across leading blockchains. The end goal is for the CRD Network to be a one-stop solution where users can fill out their KYC information and then have unlimited access to decentralized protocols integrated within its KYC service platform without having to undergo multiple registrations.
From the CRD Network Announcement:
Chainlink is the industry-leading secure blockchain middleware, enabling existing APIs to become easily compatible across blockchain networks. Through the CRD Chainlink node, we can supply our compliance API data directly on-chain as well as cryptographically sign the data to prove that it originated from the CRD Network. Also, no data will be visible on the node, so the process retains anonymity.
The CRD Chainlink node will give smart contract based applications and DAO’s a plug-n-play solution for meeting regulatory compliance around Know-Your-Customer (KYC) laws. For example, a DeFi application could easily whitelist public addresses before an ICO to verify accreditation.
Similarly, DeFi applications could use KYC data to launch enterprise implementations around common use cases such as KYC compliant lending markets. Ultimately, the launch of the CRD Chainlink node will help increase the adoption of enterprises and institutions across DeFi, which need KYC services in place in order to participate.
DeFi systems like the CRD Network aren’t the only entities to tap Chainlink for greater transparency and security.
The Associated Press news agency recently announced the launch of its own Chainlink oracle node to ensure any data from its U.S. newspaper and broadcaster members would be cryptographically verified.
Once the node is operational, the company said that smart contract developers would have access to the agency’s “economic, sports, and race call data.”
The AP said its primary reason for the shift to blockchain was “trust,” in that the on-chain data it provided would be “a publicly accessible, safe and secure record of verified information.” It’s a strong indication of Chainlink’s ability to provide that trust when the largest and oldest news agency in the world taps them for help.
Chainlink’s native token, LINK, has risen in value by about 33 percent recently, likely as a result of the increased use of its technology. The company’s reliability is exactly why it was chosen for the CRD Network, said Amine Larhrib, who founded the Network in 2018.
“The CRD Chainlink node is key to seamlessly connecting our existing KYC data solution to leading blockchains, creating avenues for decentralized applications to more easily operate within regulatory compliance,” said Amine Larhrib. “We’re excited to bring an easy plug-and-play KYC solution to a broader set of users and developers through Chainlink, ultimately help DeFi protocols onboard larger institutional users.”