The Pakistan Banks’ Association (PBA), a group of 31 traditional banks operating in Pakistan, has signed on to develop a blockchain-based Know-Your-Customer (KYC) platform.
Pakistan’s first eKYC platform
On March 2, the PBA signed a contract to develop Pakistan’s first blockchain-based national eKYC platform. With this step, they want to strengthen anti-money laundering capabilities and at the same time counter terrorist financing. This is an initiative led by the State Bank of Pakistan (SBP).
Member banks include international branches such as the Industrial and Commercial Bank of China, Citibank and Deutsche Bank. In addition, the blockchain platform will improve operational efficiency. This is mainly aimed at improving the customer experience during onboarding.
The Avanza Group has been commissioned to develop the blockchain-based eKYC platform named “Consonance”. This platform will be used by member banks to standardize and exchange customer data through a decentralized and self-regulated network. However, the customer data is shared based on consent, which allows banks to assess existing and new customers.
Issuance of a CBDC
Pakistan thus joins other countries in the race to develop a central bank digital currency (CBDC). The country recently signed new laws to ensure the launch of a CBDC by 2025.
The SPB will issue licenses to electronic money institutions for the issuance of the CBDC. SBP Deputy Governor Jameel Ahmad concluded:
These groundbreaking regulations are a testament to the SBP’s commitment to openness, technology adoption and digitization of our financial system.