CBSL Begins the Process of Developing a Blockchain Technology based KYC Proof of Concept
The Central Bank of Sri Lanka (CBSL) entered into agreements to commence the process of developing Blockchain Technology-Based Shared Know-Your-Customer (KYC) proofs of concept (POCs) on 7 July 2020. CBSL recognized the potential advantage of Sri Lanka’s financial services in 2018 and began an inter-industry study of Blockchain Technology, with the willing participation of the banks and the IT industry. CBSL determined to flag the way for Blockchain Technology based financial service solutions in Sri Lanka, developing a Shared KYC solution. The CBSL advertised summoning companies with expertise in developing Blockchain Technology-based solutions for Shared KYC to enter this project voluntarily. Upon receiving several applications, the CBSL chose three applicants to develop POCs concurrently.
Over 40 companies, including 17 foreign companies, applied separately or jointly, to develop the POC. After various rounds of selection, the CBSL elected 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 (Pvt) Ltd and Linearsix (Pvt) Ltd, both Sri Lankan companies, as joint applicants.
Agreements were signed between the chosen applicants and CBSL, with the attendance of Deshamanya Prof. W D Lakshman, Governor of Central Bank of Sri Lanka, amidst the presence of senior bank officials. The Governor stated in a statement that “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 the digital financial inclusion of Sri Lankans. Shared KYC opens avenues to seek opportunities for increasing access to financial services through digital and remote onboarding.”
As the Chairman of the National Payment Council, Deputy Governor of the CBSL, Mr. H. A. Karunaratne, remarked on the interest that companies from all over the world join this national project that occurred in a remarkably competitive selection process. He highlighted the significance of regulator-led inter-industry initiatives to promote digital innovation in Sri Lanka in all areas and harness talent locally and internationally.
Assistant Governor Mr. R A A Jayalath emphasized that the advantage of the findings of the POC will not benefit Sri Lanka but also help develop the understanding of applying Blockchain Technology for financial services at a global level. Mr. D Kumaratunge, Director Payments, and Settlements noted that Sri Lanka has started on a journey to promote Digital Transactions due to the immense advantages. He emphasized that having a POC for Shared KYC facility on Blockchain Technology will unquestionably help advance financial services.