The platform will be developed by the Avanza Group, which specialises in customer experience management solutions, blockchain applications, advanced banking applications, and artificial intelligence. This new endeavour to create the electronic KYC system is part of the State Bank of Pakistan’s plans to improve the country’s anti-money laundering (AML) and counter-terrorist financing (CTF) control infrastructure.
The ceremony for the contract signing was held in Karachi and saw the participation of the Pakistan Banks’ Association Chairman as well as the CEO of Avanza Innovations. The PBA consists of a group of 31 traditional banks operating in Pakistan. The e-KYC platform is named Consonance, and it leverages blockchain technology to allow banks to standardise and exchange personal details through a decentralized and self-regulated network. According to the Pakistan Banks’ Association, this personal details exchange will take place with the customers’ consent.
In essence, the platform will allow banks to make assessments of their new and existing customers by using data from KYC checks performed by other institutions. The move aims to minimise onboarding costs while facilitating financial inclusion by making it easier for customers to open accounts.
PBA officials cited by coinspectator.com emphasised the platform’s potential to strengthen AML controls and enhance customer experience by improving efficiencies at participating banks.
According to coingeek.com, Pakistan is in the race to develop a central bank digital currency and has brought forth new laws that aim to ensure a CDBC launch by 2025. In December 2022, the State Bank of Pakistan (SBP), the country’s central bank, announced the formulation of new regulations for Electronic Money Institutions (EMI) to aid its efforts in launching a CBDC. These EMIs are non-bank entities with the power to issue digital currency for digital payments in support of the central bank.
Apart from the provision of a three-year window for the launch of the central bank digital currency, the rules also take into account the misuse of digital assets in money laundering, terror financing, and drug trafficking. The new rules also include proper Know Your Customer (KYC) requirements and consumer protection guidelines.
The goal for Pakistani authorities is to close the gap between Pakistan and other Asian such as Indonesia, Singapore, Thailand and Hong Kong that are already making progress in their CBDC endeavours.
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