Proof launches digital credential solution to streamline crypto compliance

Proof has launched a digital credentialing platform to streamline identity verification and regulatory compliance in blockchain transactions, helping financial institutions meet standards like KYC and US sanctions screening. This innovation supports the broader shift toward decentralised infrastructure, which is driving rapid growth in the blockchain market, which is projected to grow in the coming years.

Proof, a platform focused on digital identity verification, has introduced a digital credential solution aimed at improving compliance and identity verification in the digital asset ecosystem. The offering is designed to help digital wallets, service providers, and users verify identity and Know Your Customer (KYC) characteristics securely and efficiently, particularly in blockchain-based transactions.

Proof makes blockchain-based payments regulation easier

While digital asset transfers have become almost instantaneous, regulatory compliance processes remain slow and fragmented. Proof’s credential system addresses this gap by enabling instant verification of identity and compliance characteristics, such as sanctions screening, for participants in on-chain transactions. These are intended to support the scalability of blockchain-based payment networks by scaling the regulatory process.

One of the key components of the launch is an entity-level certification solution for US sanctions screening. This feature allows financial institutions like banks, exchanges, and e-wallet services to verify the sanctions status of counterparties in real time. Proof serves as a centralised authority, issuing cryptographically secure credentials that facilitate due diligence and compliance reviews.

Pat Kinsel, founder of Proof, said, “There is incredible innovation and potential in blockchain technology to transform finance, and digital credentials are a necessary component for these networks to support mainstream payments and other financial services.”

“Financial institutions won’t fully embrace blockchain-based services until they can verify parties in a transaction and meet the same compliance standards they follow for traditional transactions. Proof’s identity platform bridges that gap and enables mainstream consumers and financial institutions to embrace digital assets confidently,” Kinsel continues.

Lightspark, a Bitcoin-based global payment network, is among the first adopters of Proof’s credentialing system. The company is using Proof’s Certify product to enhance its compliance infrastructure and enable real-time verification between transaction parties.

The platform also supports compliance with Travel Rule mandates, which require financial institutions to share identity information during certain transactions. Proof’s Certify integrates with these requirements, enabling providers to conduct KYC checks and share necessary data securely across payment systems. This functionality is expected to facilitate smoother integration between digital asset platforms and traditional financial institutions.

Blockchain can address digital hazards

Financial institutions continue to face steep costs from data breaches, averaging over USD 6 million per incident, a whopping 22% higher than the global average, according to the IBM 2024 Cost of a Data Breach Report. Traditional payment systems are especially vulnerable, often labeled “data honeypots” due to their centralised architecture.

But the challenges go beyond security. Legacy systems are riddled with operational inefficiencies. They depend on fragmented infrastructures and manual workflows, which lead to costly errors and frequent chargebacks. Each transaction passes through multiple intermediaries, adding time, expense, and risk, similar to navigating a congested highway with too many exits.

Blockchain technology addresses these vulnerabilities. With no central database to compromise and no payment details stored to steal, security is built into the system through cryptography and a distributed network.

Blockchain is projected to grow even more

This shift toward decentralised infrastructure is fuelling rapid market growth. According to Global Market Insights, the global blockchain technology market was valued at USD 18.3 billion in 2024 and is projected to grow at a CAGR of 53.6% from 2025 to 2034. This surge is driven by the rising adoption of decentralised services and the evolution of public blockchain platforms like Ethereum and Bitcoin.

Source: Global Market Insights, 2025

The market is divided into two components: platform and service. In 2024, the platform segment alone was valued at over USD 11 billion. These platforms, such as Hyperledger Fabric and Ethereum play a critical role in decentralised application (DApp) development and transaction security. Hyperledger Fabric offers permissioned networks ideal for enterprise use, while Ethereum supports programmable smart contracts, making it suitable for large-scale GIG projects.

Industries like finance and logistics rely heavily on these platforms, where speed and security are paramount. Ethereum, for instance, processed over 1.5 million transactions daily in 2024, underscoring its central role in decentralised finance, NFTs, and other blockchain-powered sectors.

Meanwhile, the services segment is expanding rapidly due to growing demand for consulting, implementation, and managed services. Organisations are increasingly turning to service providers to modernise legacy systems, ensure regulatory compliance, and optimise network performance.

Proof’s digital credential solution represents a step toward aligning blockchain-based financial services with regulatory standards. By offering tools for real-time identity verification and sanctions screening, the platform seeks to improve trust and compliance in the digital asset space.