Photo by Sri Lanka Mirror

The central bank of Sri Lanka has chosen three development firms to start work on a Proof-of-Concept (PoC) Know-Your-Customer (KYC) blockchain platform, local news outlet the Daily Mirror said on 2 July.

According to the publication, the central bank started the project back in November 2019, when it invited software firms around the world to develop a blockchain-based platform that would enable the government and banking sector to quickly and securely share and update customer data. Out of the 23 applications the bank received, it decided to shortlist only three firms, one of which is rumored to be foreign.

D. Kumaratunge, the central bank’s director of payments and settlements, said during a speech in Colombo:

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“We invited software companies to develop a shared KYC PoC free of charge, as a national project. The response to join this project, both locally and internationally, has been extremely heartening and we are happy to say that we have finalised selecting suitable applicants to begin development shortly.”

The three firms are expected to complete the development of their PoC’s in the next six to nine months, after which reports will be submitted for evaluation by the payments and settlements department, the National Payment Council and the Monetary Board. During his speech, Kumaratunge revealed that several banks have already given their consent to joining the new project.

The aim of the central bank’s project is to allow banks to onboard new customers without the delay from manual processing, as well as to reduce the costs associated with paper-based methods of verifying documents.

In recent years, Sri Lanka has been taking steps to meet international standards, by improving its financial sector. Back in 2017, the Financial Action Task Force (FATF) placed the country on the so called “grey list”, which represents countries whose Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) regimes are considered inadequate. The country was finally removed from the list in 2019, when a FATF assessment of the country’s AML and CFT measures stated that it had begun reforms, and that “the necessary political commitment remains in place to sustain implementation in the future”.

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