Pakistan banks agree on blockchain-based KYC system development

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.