How Banks Actually Secure High-Value Transactions
The Banking Model: Defense in Depth
Visual concept: Diagram showing a transaction flowing through multiple independent checkpoints
When a bank moves $10 million, they don't rely on one approval system. They use multiple independent layers where:
- •Any single point can fail — whether through error, coercion, or compromise
- •No single breach cascades — compromising one layer doesn't give access to the next
- •Systems are isolated — operations, compliance, and executive teams work independently
This isn't bureaucracy. It's isolation architecture: if Level 1 is hacked, Level 2 is still secure. If a compliance provider is compromised, the operations team operates independently.
Key principle: Assume any single checkpoint will eventually fail. Build accordingly.
Why Standard Blockchain Multisig Breaks This Model
Visual concept: Side-by-side comparison diagram
Traditional Multisig: Single Layer, Equal Power
A standard 5-of-9 multisig means:
- •All 9 signers exist in one approval layer
- •All signers have equal authority
- •Get 5 signatures → transaction executes immediately
- •No isolation between signers
- •No sequential review process
- •No time windows for fraud detection
The problem: This is a single point of failure dressed up as security. Compromise 5 signers = compromise everything.
What's Missing?
- ❌No sequential review — All signers approve in parallel, not in stages
- ❌No role separation — Operations and executives have equal power
- ❌No amount-based rules — $1,000 and $10M follow the same approval path
- ❌No review windows — Once quorum is met, execution is immediate
- ❌No isolation — Breach one layer = potential access to all signers
The Real-World Gap
Why This Matters for Institutional Adoption
Banks and financial institutions can't use standard multisig because:
Regulatory requirements
Auditors expect tiered approvals with clear separation of duties
Risk management
Internal controls require different authorization levels based on transaction size
Operational security
No single compromise should threaten the entire system
Audit trails
Need to prove that operations, compliance, and executive reviews happened independently
Result: Billions in tokenized assets remain in centralized custody because blockchain security models don't match institutional requirements.
What Defense in Depth Actually Requires
The Non-Negotiable Requirements
For blockchain to match banking-grade security, you need:
1. Multi-level sequential approval
Operations reviews → Compliance reviews → Executive reviews
Not: Everyone reviews at once
2. Independent checkpoints
Each level operates in isolation
Not: All signers see each other's actions
3. Amount-based thresholds
$5k needs 2 approvals, $5M needs 9 approvals across 3 levels
Not: One-size-fits-all quorum
4. Time-locked progression
Review windows between layers to catch fraud
Not: Instant execution after quorum
5. Veto capability
Any authorized party at any level can cancel
Not: Just waiting for enough approvals
None of this exists in standard multisig.
The Bottom Line
Traditional finance doesn't trust single approval layers — no matter how many signatures they require.
Defense in depth isn't about collecting signatures.
It's about isolation, sequential review, and assuming any single point will eventually be compromised.
Standard blockchain multisig fails this test.
We built the solution banks actually need.
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