In the rapidly evolving financial landscape, permissioned public blockchains are reshaping how financial institutions (FIs) adopt and implement blockchain technology. These blockchains offer a hybrid approach, combining the transparency and accessibility of public blockchains with the control and security features of private blockchains. This makes them highly attractive to FIs, which prioritize both regulatory compliance and operational control.
Why Permissioned Public Blockchains Are Crucial for FIs
Traditional public blockchains provide transparency and decentralization but often lack the regulatory safeguards needed by FIs. Meanwhile, private blockchains, while secure, limit interoperability and openness. Permissioned public blockchains bridge this gap by enabling only verified participants to validate transactions, thereby meeting strict compliance standards like Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. This balance allows FIs to leverage the cost-efficiency and speed of blockchain while ensuring regulatory adherence, making them ideal for large institutions that need controlled transparency and accountability.
Moreover, the Basel Committee on Banking Supervision address specific risks posed by permissionless blockchains, including:
- Lack of Oversight: Permissionless blockchains lack centralized control over validators, which raises concerns about governance, security, and accountability in financial transactions.
- Regulatory Challenges: Permissionless blockchains struggle with KYC (Know Your Customer), AML (Anti-Money Laundering), and CFT (Countering the Financing of Terrorism) compliance, making it difficult for banks to adopt them without significant regulatory risk.
- Settlement Risk: Unlike traditional assets, many permissionless blockchains don’t offer settlement finality, increasing the risk of transaction failure, especially during times of high transaction volumes.
- Operational Risks: Issues like hard forks (splits in blockchain) and low transaction throughput can severely hinder performance, particularly during financial crises when many users attempt to withdraw assets simultaneously.
- High Cost for Banks: Due to these risks, the Basel Committee imposes high regulatory costs on banks holding assets on permissionless blockchains, making it prohibitively expensive for them compared to permissioned blockchains.
How SeaSeed Network Supports Financial Institutions
SeaSeed Network exemplifies the benefits of a permissioned public blockchain tailored for financial institutions. Through strategic partnerships with leading licensed financial institutions across Asia-Pacific, including Bank BTN, SaiSon Capital, and UOB Venture Management, SeaSeed ensures that its validator nodes are operated by trusted entities. This setup not only provides a secure and compliant environment for tokenizing real-world assets (RWAs) but also establishes a reliable framework for cross-border asset transfers and transactions.
Our mission is to empower the Asia-Pacific market by integrating trusted, regulated financial institutions as backers, validators, and asset issuers, offering both institutional-grade security and DeFi composability for real-world assets.
What We Do
- Tokenize Real-World Assets: SeaSeed Network enables the secure and compliant tokenization of assets like commodities, bonds, and private equity, making them accessible to both institutional and retail investors.
- Trusted Partnerships: Our validator nodes are operated by licensed institutions, ensuring asset authenticity and regulatory alignment.
- Cross-Border Opportunities: Through a permissioned public blockchain, we make cross-border asset transfers seamless and accessible for both Web3 and TradFi users.
Conclusion
SeaSeed’s platform enables FIs to tokenize assets like commodities, bonds, and private equity efficiently, opening new investment opportunities while maintaining a high standard of compliance and security. By facilitating cross-border transactions and enhancing asset liquidity, SeaSeed creates seamless access for both Web3 community and traditional financial participants.
As FIs increasingly explore blockchain solutions, permissioned public blockchains like SeaSeed Network present a compelling model. We offer the transparency, security, and regulatory compliance needed to safely bring real-world assets onto the blockchain, bridging the gap between TradFi and DeFi. With its trusted partnerships and secure infrastructure, SeaSeed Network is set to play a pivotal role in the future of finance, enabling financial institutions to harness the benefits of blockchain with confidence.
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SeaSeed Network: Aimed at bridging the gap between traditional and decentralized finance, SeaSeed Network offers a robust real-world asset layer-1 blockchain solution for the seamless onboarding of financial assets into the Web3 space. We empower top-tier financial institutions to seamlessly tokenize their assets.
