Cheqd and The CeDeFi Alliance to Boost DeFi Adoption With Decentralized Compliance
Cheqd has revealed it’s now a full member of the CeDeFi Alliance. In becoming one, it has secured a high-profile partner that will help it to promote its idea of a decentralized self-sovereign identity protocol to blockchain projects, regulatory bodies, and other relevant parties.
In a blog post announcing the move, Cheqd makes it clear that DeFi urgently needs a way to ensure it can stay compliant with government regulations if it’s to benefit from greater adoption by institutional organizations. While many enterprises and high-net-worth individuals around the world are interested in DeFi, the truth is that many of them won’t touch it due to fear of falling out of compliance. For many, DeFi is a shady world of scammers and money launderers, and reputable organizations naturally want to avoid being associated with anything untoward.
What’s needed then – according to cheqd – is a way for DeFi protocols to prove they’re in compliance with all of the regulatory requirements of the countries they operate in. The challenge is doing this in a way that adheres to the decentralized principles of DeFi, where users are able to transact with full anonymity.
Cheqd thinks it has hit on a solution with its revolutionary SSI architecture that’s able to satisfy requirements around identity, KYC and AML rules without users giving up their identities. Cheqd’s blueprint describes a digital identity, similar to a driving license or passport, that can be obtained when an individual or company undergoes checks with a trusted entity just once. With that digital ID, the user will then be able to prove they are who they claim to be, with hundreds of different services and products, without ever undergoing another check again. It will therefore allow users to interact with DeFi anonymously and compliantly.
Cheqd has already built much of this architecture but it needs help in getting it off the ground, and that’s where the CeDeFi Alliance comes in. As a full member of the Alliance, cheqd will be able to utilize its contacts in the blockchain industry and regulatory landscape to promote its vision.
The goal of the partnership is to create a robust policy framework for SSI that will govern how it’s used by DeFi protocols in order to ensure compliance across multiple jurisdictions. Ultimately, it will be up to each protocol if it wants to adopt an SSI architecture or not, but cheqd said that doing so would bring huge benefits to the industry.
“Taming DeFi through accountability gives greater confidence to prospective investors and opens DeFi to wider adoption,” said cheqd co-founder and CEO Fraser Edwards.