CB kicks off work on blockchain-based KYC platform

Seated from left: Sampath Bank Managing Director Nanda Fernando, CBSL Assistant Governor R.A.A. Jayalath, and University of Colombo School of Computing Director Prof. K P Hewagamage. Standing from left: CBSL Director (Payments and Settlements) D. Kumaratunge, CBSL Governor Prof. W.D. Lakshman, and Deputy Governor H.A. Karunaratne

 Seated from left: Yaala Labs CEO Lalin Dias, CBSL Assistant Governor R.A.A. Jayalath, and Linearsix CEO Mario Gooneratne. Standing from left: CBSL Director (Payments and Settlements) D. Kumaratunge, CBSL Governor Prof. W.D. Lakshman, and Deputy Governor H.A. Karunaratne

• POC deals signed with Sampath Bank, UoC School of Computing as joint applicants, Sweden’s norbloc AB, and Yaala Labs and Linearsix as joint applicants
• Selected from over 40 applicants, including 17 foreign, via extremely competitive process
• Platform will be developed FOC, expected to promote blockchain solutions locally and globally 
• Shared Know-Your-Customer info will vastly improve digital financial inclusion: Governor 
• Shared KYC will boost digital financial services

The Central Bank (CB) yesterday kicked off the process of developing a blockchain-based Know-Your-Customer proof of concept, with the monetary institution entering into agreements with three applicants. 

It has entered into agreements to begin the process of developing blockchain-based shared Know-Your-Customer (KYC) proofs of concept (POCs) on 7 July. 

CB identified the potential benefit for Sri Lanka’s financial services in 2018 and initiated an inter-industry study of blockchain technology, with the voluntary participation of the banks as well as the IT industry. 

The CB decided to pave the way for blockchain-based financial service solutions in Sri Lanka developing a shared KYC solution, and advertised inviting companies with experience in developing blockchain-based solutions for shared KYC to join this project on a voluntary basis. Upon receiving a number of applications, the CB selected three applicants to develop POCs concurrently.

Over 40 companies, including 17 foreign companies, applied either individually or jointly to develop the POC. After several rounds of selection, the CB selected three applicants to be tasked with this pioneering project in Sri Lanka. 

The selected applicants are Sampath Bank PLC together with the University of Colombo School of Computing (UCSC) as joint applicants; norbloc AB from Sweden; and Yaala Labs Ltd. and Linearsix Ltd., both Sri Lankan companies, as joint applicants.

Agreements were signed between the selected applicants and CB, with the attendance of CB Governor Prof. W D Lakshman and senior bank officials.

In his remarks, Prof. Lakshman stated: “As we live in a world where every aspect of our lives is becoming digital, the Central Bank has taken a lot of effort to improve the digital financial infrastructure of Sri Lanka. Evaluating the feasibility of using a technology such as blockchain to securely share KYC information has the potential to vastly increasing digital financial inclusion of Sri Lankans. Shared KYC opens avenues to seek opportunities for increasing the access to financial services through digital and remote onboarding.”

As the Chairman of the National Payment Council, CB Deputy Governor H. A. Karunaratne remarked on the interest that companies from all over the world join this national project, which resulted in an extremely competitive selection process. He emphasised the importance of regulator-led inter-industry initiative to promote digital innovation in Sri Lanka in all areas, and harness talent both locally and internationally.

Assistant Governor R. A. A. Jayalath highlighted that the benefit of the findings of the POC will not only benefit Sri Lanka but also help advance the understanding of applying blockchain technology for financial services at a global level.

Payments and Settlements Director D. Kumaratunge noted that Sri Lanka has embarked on a journey to promote digital transactions due to the immense benefits it offers. He highlighted that having a POC for shared KYC facility on blockchain technology will undoubtedly help advance financial services in the country.