Fireblocks highlights why banks struggle to certify onchain records, citing regulatory, technical, and audit challenges in digital asset operations.

A recent analysis by Fireblocks has shed light on the challenges banks face in verifying their own onchain records, emphasizing the need for third-party validation to meet regulatory and audit standards. The findings come from Fireblocks’ Financial Grid survey, which surveyed financial institutions on the complexities of building wallet infrastructure for digital asset operations.

The survey revealed that compliance and regulatory requirements are the top concern for 52% of respondents, followed by integration with core banking systems at 47%, security architecture and key management at 44%, and 24/7 operational readiness at 39%. Financial and regulatory reporting ranked last, with only 3% of respondents citing it as a primary challenge. According to Fireblocks, this reflects the sequential nature of banks addressing operational hurdles, with audit readiness becoming a critical issue only during regulatory filings or audits.

Fireblocks highlights a fundamental issue: core banking systems are not designed to natively interact with blockchains. These systems, built to track interbank money flows, cannot directly read or reconcile onchain activity. As a result, banks must create a system of record that translates blockchain activity into formats compatible with their general ledger systems. However, this self-built system cannot independently verify whether the bank’s records align with blockchain data, as it relies on the same internal processes it aims to validate. This creates a conflict of interest and undermines the reliability of self-attestation.

Additionally, raw blockchain data lacks the SOC (System and Organization Controls) reporting framework required for auditors to rely on it as evidence.

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