“This new category of institutions will complement efforts of government in establishing an enabling environment to empower stakeholders in trade & commerce,” said finance minister.
In order to build a national electronic Know Your Customer (eKYC) banking platform using blockchain tech, the Pakistan Banks’ Association (PBA) has agreed to work with others on the project.
The project contract was signed by PBA members in the presence of important executives at the association’s Karachi headquarters. The document states that Avanza Group, a tech company with considerable experience in blockchain and Artificial Intelligence, will construct the groundbreaking eKYC platform, called “Consonance” (AI).
The partnership is seen as the PBA’s attempt to adhere to the State Bank of Pakistan’s (SBA) anti-money laundering (AML) regulations. The Pakistani central bank has been enhancing the framework for anti-money laundering and counter-terrorism financing for financial institutions and service providers since 2020.
Upon launch, Consonance will rely on blockchain to provide banks and other financial institutions with a standardised framework to carry out KYC checks that will be interoperable across the board. The ease of adding new customers to financial platforms and increasing operational effectiveness for current users are two additional benefits associated with the introduction of the eKYC platform.
“This will be a support platform for Pakistan’s banking industry, and all participating member banks will be able to perform assessments of their existing, as well as new, customers, using information and data available with any other bank on “Consonance,” according to a PBA statement.
Decentralization and transparency are the two main tenets of the project, and the association made it clear that sharing customer information will only be done with the full consent of the customer. Citibank, Deutsche Bank, and the Industrial and Commercial Bank of China are just a few of the 31 domestic and foreign banks that make up the PBA.
Banks in Pakistan are getting ready for the introduction of the central bank digital currency (CBDC), which is expected to fundamentally alter the financial landscape. The central bank announced the creation of new legislation to govern Electronic Money Institutions (EMI) in advance of the launch in 2025.
“This new category of institutions will complement the efforts of the government in establishing an enabling environment to empower stakeholders in trade and commerce,” the finance minister said. In the CBDC race, Pakistan aspires to catch up to its next-door neighbour, India. Industry insiders predict that the country’s central bank will use blockchain to introduce both retail and wholesale CBDCs.