Looking to secure the rail from DeFi to traditional finance, AllianceBlock is launching its trustless identify verification software

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Dutch decen­tralised P2P finance plat­form Alliance­Block yes­ter­day launched its own trust­less iden­ti­ty soft­ware to under­pin reg­u­la­to­ry com­pli­ance for trans­fers mov­ing back and forth across cryp­to and tra­di­tion­al finance channels.

Reduc­ing bar­ri­ers between DeFi (for decen­tralised finance) and tra­di­tion­al bank­ing is a lucra­tive zone for star­tups to enter at a time when some of the old-school and chal­lenger banks have start­ed play­ing with decen­tralised cur­ren­cies and technologies.

Espe­cial­ly bear­ing in mind DeFi’s allure grows main­ly because it’s an open play­ing field by com­par­i­son to reg­u­lat­ed banks (though in the EU and US tougher rules have been called for), with banks sub­ject­ed to a gamut of “anti-laun­der­ing checks” and “know-your cus­tomer” process­es that hold up cur­ren­cy trans­fers all too often.

Trust­less iden­ti­ty ver­i­fi­ca­tion (TIDV) is a blockchain-based alter­na­tive — the chain allows sets of users to receive dig­i­tal iden­ti­ties with­out endan­ger­ing pri­va­cy, while the finan­cial ser­vices provider can review the user’s dig­i­tal infor­ma­tion, mean­ing each cus­tomer only needs to fill out one KYC appli­ca­tion, as data can be safe­ly exchanged and stored.

To start with, Alliance­Block will let the TIDV plug-in play with its ful­ly decen­tralised peer-to-peer fund­ing plat­form on the chain, Fun­drs, avail­able across sev­er­al blockchains includ­ing Main­net, Ethereum and Avalanche.

Iden­ti­ty checks are pro­vid­ed by Alliance­Block­’s part­ner GBG, which aims to spe­cialise in KYC mod­els that “bridge the gap” from blockchain to tra­di­tion­al finance. 

Post-check­ing, a hashed record with KYC data is cre­at­ed, but only for the intend­ed recip­i­ent, who can con­firm iden­ti­ty across all its ser­vices. The pro­vid­ing user can end con­sent for their blockchain hash at any time.

Alliance­Block­’s for­ward plans for TIDV include fur­ther inte­gra­tions with its DeFI infra­struc­ture, specif­i­cal­ly its DeFI Ter­mi­nal, DEX and Data Tun­nel. More fea­tures are on the way, includ­ing sup­port for hard cryp­to wal­let devices.

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