This sequence illustrates how business actions are validated against regulatory and institutional policies prior to execution. Transactions are authorized only after compliance requirements are satisfied. Execution on blockchain networks occurs exclusively following approval, ensuring that all on-chain activity is policy-compliant by design. Detective compliance is necessary—but insufficient. Once a non-compliant transaction executes on a blockchain, the legal and operational consequences already exist. Preventive compliance avoids the problem entirely. The COBI Stack: Four Integrated Layers COBI is best understood as a stack of four tightly integrated layers, each addressing a failure point in traditional blockchain architectures. Layer 1: The Process Layer (Human-Readable Authority) Function : Define what is allowed to happen using formal, standardized business process models. The process layer creates a shared language between technology and governance. Regulators can review it. Boards can approve it. Auditors can trace it. Developers implement it—but do not define it. Key Characteristics: - Expressed in human-readable notation (BPMN 2.0 with Web3 extensions) - Owned by operations, compliance, and legal teams - Reviewed and approved before deployment - Serves as the authoritative definition of execution logic - Automatically compiled into executable smart contracts Why It Matters : When developers translate business requirements into smart contracts, compliance intent is frequently lost or misinterpreted. Process orchestration ensures that what compliance teams specify is precisely what executes on-chain. In COBI, process is law . Layer 2: The Policy Layer (Executable Compliance) Function : Translate regulatory and institutional requirements into deterministic, executable rules. This is not about checking logs or flagging anomalies. It is about making a binary decision: allow or block.
Made with FlippingBook Digital Publishing Software