STEX.com Founder Proposes International Registry of Verified Identities Solution unveiled at ISO 20022 Hackathon
An innovative and secure means of verifying cryptocurrency transactions could be achieved using a combination of SWIFT Messages and Blockchain, says Vadym “VK” Kurylovych, founder of the global cryptocurrency exchange STEX.com. This solution, which could accelerate the mass acceptance of cryptocurrency was unveiled during the ISO 20022 Hackathon, which was held late March.
“The tremendous demand worldwide in cryptocurrencies calls for improved and streamlined processes to verify the identity of persons involved in transactions,” VK said. “We believe our solution which relies on existing infrastructure rather than creating another layer red tape is the solution.”
VK and a team of three other digital currency and blockchain experts outlined the plan in their presentation, which identified the current issues surrounding verification.
“The core issue of verification lies in the public and private keys held by a user,” VK said. “These keys were developed to protect the identity of the person holding the keys. But how can we be sure of the person’s identity – that they are who they say they are. And even more, how do we know the private key they are using is really theirs, which assures legal recognition of the contract/transaction?”
The solution the team said, is twofold: 1) create a public key “certificate,” and 2) send the key via SWIFT, the massive messaging network currently used by banks and other financial institutions that is proven to provide secure and accurate information.
By sending the transaction via SWIFT with a message such as “Herby I confirm I’m the real owner of the public key certificate with id XXXXXXX,” identify can be confirmed. Plus, the recipient of the payment can store a similar statement in the same contract electronically, verifying the identity of the sender.
To assure the legal recognition of signatures made by the key, V.K. and his team proposed using existing international law, primarily the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which could mediate disputes.
“Using trusted methods such as SWIFT will further solidify the veracity of cryptocurrency transactions within the traditional financial systems, “ V.K. concluded.
The Hackathon included 260 participants across 60 teams that spent 7-days applying ISO 20022 and APIs to improve cross-border payments.