Blockchain Firm Says Banks Need DLT to Manage Identities Better

Blockchain firm HashCash Consultants claims that banks are "chief arbiters" of people's identities, and need blockchain technology to do it better.

According to an Aug. 11 announcement, “accurate identification of an individual is central to banking activities which makes them the chief arbiter of people's identities.” Still, the current system is not without its issues:

“The existing manual processes make identification time-consuming and susceptible to errors. HashCash aims to streamline the process by helping the partner bank create digital identities for the customers over a decentralized network, where the customer data will be recorded on an immutable ledger, eliminating any chance of identity theft and forgery.”

Per the announcement, a United Arab Emirates bank will use the blockchain-based digital identity system offered by HashCash. A representative told Cointelegraph that he cannot reveal which bank they are referring to “due to legalities involved in the clauses.”

HashCash plans to create a federated and sovereign digital identity architecture to be used in banking processes. The system would purportedly simplify identity verification and streamline customer onboarding, loan applications and processing, and know your client checks for account opening. 

HashCash's CEO Raj Chowdhury said, "Accurate identification of an individual is central to banking activities which makes them the chief arbiter of people’s identities. Having a bank account is essential for buying property, securing a loan, and getting a job. But, the existing manual processes make identification time-consuming and susceptible to errors.”

Chowdhury claims that HashCash’s digital identity system helps banks in creating digital identities for customers on a decentralized network, which prevents theft and forgery of credentials. 

Decentralized identity solutions are becoming an increasingly active area of development in the cryptocurrency space. At the beginning of June, a representative of LG’s information technology subsidiary, LG CNS, told Cointelegraph that blockchain-based identity systems could become the new standard. He has gone as far as to say that “maybe all login functions can be replaced.”

At the end of May, LG CNS also announced a partnership with United States-based company Evernym aimed at developing a blockchain identity standard for the World Wide Web Consortium.