After the cold collapsing of the Fiat system by the arrival of Cryptocurrency, the combination of it with blockchain for enterprise technology is on the mainstream these days. The digitization of currency and democratization of money with all new way of transacting with anonymity made crypto arise as an ultimate antithesis of the traditional banking system and financial sector.
Since the regulated institutions are in search of foraying into the world of digital assets, the security tokens are the emerging trends in technology. In the words of an article by the Unbound,
“The issue? Transactions from regulated institutions must adhere to compliance requirements – and it’s a complicated process involving multiple checks and balances. In other words: Cryptocurrency and regulations don’t mix well – at least, not without some much-needed modifications.”
In this scenario, Quorum Authorization provides added security to blockchain transaction along with that, it can ensure that a smooth, automated compliance check process is delivered with its combination with the risk-based policy in the case of digital assets. basically, every security token transaction makes it mandatory to adhere to basic compliance regulations. That includes Anti-Money Laundering (AML) and Know Your Customer (KYC).
In practical books, the post mentions that
” To ensure that security token transactions are handled according to regulations, a well-built quorum would include at least 3 quorum groups made up of multiple participating parties: a minimum of one exchange employee (administrative division), a trustee of the account, and a quorum group comprised of a bot for AML compliance, a bot for KYC compliance, and a bot for anti-fraud regulations – plus a human compliance officer.”
The compilation will require the authorization of at least one account trustee and one exchange employee from administrative service part of the organization. The only drawback is that quorum relies on some levels of manual input which slows down the transaction speed. It is a sort of accessing a cold storage method which can take days or weeks.
For the accessibility of quorum, it has been mentioned that
“With secure multi-party computation (SMPC)-based systems, those quorums can be programmed not only with human participants, but with bots as well – allowing the entire system to be automated, and reducing the risk of human error. Security token transactions can be made as secure as fiat – at lightning speed, and in an era ready for the digital transformation of the financial services sector.”
The MPC is a software that allows participants to be added or removed as per the necessity. This avoids the risk of former employees raging war against the system using hacker control or mal-theme technology.