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The mainstream banking and financial industry has been apprehensive about extending support for Bitcoin and other cryptocurrencies due to their independent and pseudonymous nature., The mainstream financial sector is bound by various rules, regulations and compliance requirements that make it hard for them to venture out of the purview of fiat currency. But with the new alliance between Chainalysis — a blockchain analysis firm and Nets- a Denmark-based payments provider may change that.
According to media reports, both Nets and Chainalysis are working together to create a solution that helps banks validate cryptocurrency transactions, in accordance with the necessary compliance requirements. The solution, once implemented might open the doors of Nordic banks to Bitcoin payments and operations while ensuring compliance with the existing regulations. The collaborative effort can potentially benefit over 240 financial institutions in the Nordic region to whom Nets already provides payment services.
The CEO of Chainalysis, Michael Gronager explained the use of its cryptocurrency security solution by saying,
“We can make risk assessments and analyze blockchain activities… And banks are interested in being able to risk-score customers, so they do not end up being used for money laundering …. If a bank’s customer is a risk, the financial institution can choose to send a ‘suspicious transfer report’ to the authorities, which can use our tools to trace and identify the customer.”
Chainalysis is not new to the legal and regulatory environment in Europe as the company has been offering its services to Europol for some time now. The company is responsible for linking digital identities to cryptocurrencies to assist various investigations. The increased focus on cryptocurrency/blockchain security and analysis in Denmark has made it possible for Chainalysis and Nets to extend the high-tech crime-fighting capabilities of the regional organizations further. The head of fraud division at Nets, Kati Rintala said,
“An increasing number of our customers among the Nordic banks have asked for an effective tool to help them comply with legislation.”
Once the technology is implemented, banks will find dealing with Bitcoin as simple and easy as handling cash and other financial instruments that are currently in circulation.
Ref: Pymnts | Image: NewsBTC