I am caicai. Last month, I had dinner with a friend who works in risk control at a bank. I asked him: Why don't you use on-chain proof? It could clearly save a lot of review costs.
He sighed: "It's not that we can't, it's that we don't dare."
First, privacy cannot be disclosed. The biggest asset of a bank is customer privacy. Transactions on a public chain are fully open, which is equivalent to stripping customers bare for others to see. Large institutions are most afraid of operational exposure; costs will directly soar.
Second, competitive exposure. Who you trade with, what the interest rates are, how large your positions are—these are all trade secrets. Putting them on a public chain is like revealing your hand to competitors. Firms like JPMorgan would rather build their own private chains.
Third, regulatory responsibility. If something goes wrong with on-chain proof, who is responsible? It's the bank, not the protocol. Banks can experiment with new technologies but cannot take the blame.
But things are changing. SIGN has partnered with Plaid to launch Proofs.Money, allowing users to link their online banking to generate on-chain asset proofs. Banks do not need to disclose data; users can take the on-chain certificate to use elsewhere.
caicai's musings: Banks do understand value, but their business model dictates that they cannot be the first to take the plunge. SIGN is building the bridge, and once it's complete, they will naturally come over.
Still, the same saying: I only believe in what I can see and touch.