Pakistan Banks to Use blockchain for KYC

[UmerIdrees]

This is a very interesting development when the banks in Pakistan will use blockchain technology for KYC. Although this does not mean any sort of bitcoin adoption neither it is anything related to CBDC launch, but the good thing is that banks incorporate blockchain in their system and this can be a first step in bitcoin adoption (though very unlikely at this point)




https://www.binance.com/en/feed/post/275612

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[avikz]

Using blockchain for KYC is not at all the first step towards bitcoin adoption. Blockchain implementation has a wide number of use cases and most of them are not even related to cryptocurrency. There are states in my country using blockchain since last 4 years for issuing birth certificate.

Implementing blockchain for KYC is just a sensible thing to do. I don't think Pakistan will ever adopt bitcoin. But considering the current economic situation, anything can happen!

[HeRetiK]

A centralized blockchain... for storing KYC data.

There's so many layers of wrong with that sentence.

I doubt this is going to be much more than cash grab by whatever fintech company or advisor sold them on this solution.

[joniboini]

They describe their network as "decentralized and self-regulated", I guess they will use permissioned blockchain or just a shared database in general. Makes me wonder how efficient it is compared to whatever they have right now. Don't really think it will change anything other than making their database sound cooler.

From the way they describe things, I think the point of this kinda new database is to offload some cost to store data to other parties and allows banks to gain easier access to customer data. Well, at the very least they don't introduce new tokens just for that.

[NotATether]

I don't see how blockchain will make checking KYC easier for businesses, unless you need to design some data storage that can't be easily destroyed in a
 SQL injection attack. That's really the only use case that makes sense to me at this time.

But then again, you should not even be storing KYC data forever. It should be deleted as soon as the user's account is closed.

[stompix]

A centralized blockchain... for storing KYC data.
There's so many layers of wrong with that sentence.

It's already in use, and actually, it has happened before Bitcoin, the KSI blockchain in Estonia does exactly this.
https://e-estonia.com/solutions/cyber-security/ksi-blockchain/
https://www.pwc.com/gx/en/services/legal/tech/assets/estonia-the-digital-republic-secured-by-blockchain.pdf

But then again, you should not even be storing KYC data forever. It should be deleted as soon as the user's account is closed.

I don't know about the Pakistan case as they offer limited information about it but how this is implemented elsewhere it has no KYC stored, you are just granted a digital ID with which you can pass KYC checks since anyhow you need a central authority to verify this they are the ones they will issue your e-Identity. After which you can use that to sign every KYC-related check, the ones requesting it from you won't have access to that data but they will know it's you doing it.

[HeRetiK]

A centralized blockchain... for storing KYC data.
There's so many layers of wrong with that sentence.

It's already in use, and actually, it has happened before Bitcoin, the KSI blockchain in Estonia does exactly this.
https://e-estonia.com/solutions/cyber-security/ksi-blockchain/
https://www.pwc.com/gx/en/services/legal/tech/assets/estonia-the-digital-republic-secured-by-blockchain.pdf

That's an interesting rabbit hole, thank you!

I still need to digest what few information I found on it, but at a first glance it still seems more like a Git server that only stores the commit hash rather than the full data. Alas, that's probably what centralized blockchains usually boil down to.

[UmerIdrees]

From the way they describe things, I think the point of this kinda new database is to offload some cost to store data to other parties and allows banks to gain easier access to customer data. Well, at the very least they don't introduce new tokens just for that.

No, they don't have any plans to issue any type of token. Remember Crypto is not yet fully legal in our country so the question of issuing tokens and all this stuff is just a dream here.
Blockchain here is being treated as a separate technology and not thought of in terms of cryptocurrencies. Anyways the hope is still alive as one day the government will start thinking in terms of the adoption of bitcoin.

But then again, you should not even be storing KYC data forever. It should be deleted as soon as the user's account is closed.

I doubt the bank would ever want to delete the KYC data even after the account closure. I guess this data will remain with the bank so in the future if they need to audit trail any money transaction, they can use this data too.