a16z crypto says financial institutions can safely use permissionless blockchains under existing AML and sanctions laws without relying on permissioned networks

A new paper from a16z crypto, co-authored by Rebecca Rettig, argues that financial institutions can comply with BSA/AML and sanctions laws while using permissionless blockchains, without needing permissioned networks. It cites Franklin Templeton, BlackRock, and Apollo deploying products onchain, and notes FinCEN and OFAC apply risk-based, not zero-tolerance, standards. OCC Interpretive Letter 1186 (November 2025) confirmed banks may pay network fees. The paper proposes nine controls across transaction and network levels, plus cryptographic privacy techniques like zero-knowledge proofs, some still in development.

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