Pakistan banks agree on blockchain-based KYC system development

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Pak­istan Banks’ Asso­ci­a­tion (PBA) — a group of 31 tra­di­tion­al banks oper­at­ing in Pak­istan — signed off on the devel­op­ment of a blockchain-based plat­form for Know Your Cus­tomer (KYC) initiatives. 

On March 2, PBA signed the project con­tract for devel­op­ing Pakistan’s first blockchain-based nation­al eKYC (elec­tron­ic Know Your Cus­tomer) bank­ing plat­form, report­ed Dai­ly Times. The move was aimed at strength­en­ing anti-mon­ey laun­der­ing (AML) capa­bil­i­ties while coun­ter­ing ter­ror financ­ing — an ini­tia­tive led by the State Bank of Pak­istan (SBP).

The mem­ber banks include inter­na­tion­al estab­lish­ments such as the Indus­tri­al and Com­mer­cial Bank of Chi­na, Citi bank and Deutsche Bank. More­over, the blockchain plat­form will improve oper­a­tional effi­cien­cies — pri­mar­i­ly aimed at improv­ing cus­tomer expe­ri­ence dur­ing the onboard­ing process.

Avan­za Group has been tasked to devel­op the blockchain-based eKYC plat­form named ‘Con­so­nance,’ which will be used by mem­ber banks to stan­dard­ize and exchange cus­tomer data via a decen­tral­ized and self-reg­u­lat­ed net­work. How­ev­er, the cus­tomer details will be shared based on con­sent — allow­ing banks to assess exist­ing and new customers.

Relat­ed: India explores offline func­tion­al­i­ty of CBD­Cs — RBI exec­u­tive director

Join­ing oth­er coun­tries in the race for an in-house cen­tral bank dig­i­tal cur­ren­cy (CBDC), Pak­istan recent­ly signed new laws to ensure the launch of a CBDC by 2025. 

Glob­al CBDC ini­tia­tives overview. Source: Atlantic Council

The state bank, SBP, will issue licens­es to EMIs for CBDC issuance. “These land­mark reg­u­la­tions are a tes­ta­ment to the SBP’s com­mit­ment toward open­ness, adop­tion of tech­nol­o­gy and dig­i­ti­za­tion of our finan­cial sys­tem,” said Deputy Gov­er­nor of SBP Jameel Ahmad in this regard.



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