Why Banks Can’t Certify Their Own Onchain Records
Banks cannot certify their own onchain records due to gaps between blockchain data and core banking systems, requiring third-party verification to meet audit standards.
A Fireblocks survey of financial institutions ranked compliance and regulatory requirements as the top challenge in building wallet infrastructure, cited by 52% of respondents. Integration with core banking systems followed at 47%, highlighting the difficulty of reconciling blockchain activity with traditional ledgers. Security architecture and key management were noted by 44% of banks, while 24/7 operational readiness was a concern for 39%. Financial and regulatory reporting trailed at 3%, underscoring the urgency of audit readiness.
Core banking systems, designed for interbank transfers, lack native blockchain compatibility, leaving finance, operations, and internal audit without a clear ledger to reconcile. A self-built system of record may reconcile daily with custodian statements but still fails to confirm whether blockchain activity aligns with the bank’s records. Raw chain data lacks SOC reporting frameworks, making it unreliable for auditors who require third-party verification to validate onchain activity.
Regulators mandate that verified data must come from a third party that reads the blockchain directly and holds certified controls, such as SOC 1 Type II reports. This ensures independence, as the team managing an activity cannot certify its own records. The verified data must also meet four conditions: direct source from self-operated nodes, self-reconciliation against archive node balances, point-in-time answers tied to specific blocks, and certified controls over data collection and storage.
Banks must host verified blockchain data in jurisdictions required by regulators, as blockchain data is not confined to a single location. This verified data can serve as a unified system of record, supporting finance, risk, compliance, and operations with consistent figures. Western Union’s 2026 selection of Fireblocks for its USDPT stablecoin infrastructure demonstrates how banks integrate verified onchain records into core systems for settlement and reporting.