Pakistani banks to develop blockchain-based eKYC platform
The Pakistan Banks’ Association (PBA) has agreed to collaborate on the creation of a national electronic Know Your Customer (eKYC) banking platform using blockchain technology.
Members of the PBA signed the project contract at the association’s headquarters in Karachi, with key executives in attendance. According to the document, the first-of-its-kind eKYC platform, called “Consonance”, will be built by Avanza Group, a technology firm with significant experience in blockchain and artificial intelligence (AI).
The collaboration is considered to be an attempt by the PBA to comply with the Anti-Money Laundering (AML) Rules of the State Bank of Pakistan (SBA). Since 2020, the Central Bank of Pakistan has been working to strengthen the AML and Terrorism Financing framework for financial institutions and service providers.
At launch, Consonance will rely on blockchain to provide banks and other financial institutions with a standardized framework for performing KYC checks that will be interoperable across the board. Another benefit associated with the launch of the eKYC platform is that it is easy to bring new customers onto financial platforms and improve operational efficiency for old users.
“This will be a support platform for Pakistan’s banking industry and all participating member banks will be able to conduct assessments of their existing as well as new customers using information/data available with any other bank on ‘Consonance’,” a PBA statement read.
The association clarified that the sharing of customer details will take place with the customer’s full consent, with decentralization and transparency as the project’s core themes.
PBA consists of 31 local and international banks operating in Pakistan, including Citibank, Deutsche Bank and Industrial and Commercial Bank of China.
Pakistan prepares for CBDCs
Pakistani banks are preparing for the launch of a central bank digital currency (CBDC), which is expected to change the financial landscape. Ahead of the 2025 launch, the central bank announced the drafting of new legislation to regulate electronic money institutions (EMIs) to assist in the rollout.
“This new category of institutions will complement the efforts of the government to create an enabling environment to empower stakeholders in trade and commerce,” Finance Minister Asad Umar said.
Pakistan hopes to close the gap between the country and neighboring India in the CBDC race. Industry experts believe that the central bank will rely on blockchain for the launch of both retail and wholesale CBDCs for the country.
See: New technology, new future for nations
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