Establishment of the DVCC “Personal Verification Subcommittee”
Mitsubishi UFJ Trust Bank, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Mizuho Financial Group, Fukuoka Financial Group, Yokohama Bank, and Shizuoka Bank have jointly established the Personal Verification Subcommittee within the DID/VC Co-Creation Consortium (DVCC), hosted by Mitsubishi UFJ Trust Bank. The Subcommittee will begin verification of the effectiveness and feasibility of new personal verification methods using Decentralized Identifiers (DID) and Verifiable Credentials (VC).
1. Purpose of Establishing the Personal Verification Subcommittee
Currently, the importance of KYC (Know Your Customer) is increasing in various transactions, and strict personal verification is required at the time of transactions. However, the need for similar personal verification procedures for each transaction raises concerns about privacy risks as personal information is shared with various businesses, as well as the increase in verification costs.
Furthermore, with digitalization, the structure of economic activities is expanding beyond the traditional business-to-individual model to include peer-to-peer transactions. This trend has led to a rise in financial crimes such as money laundering, making it challenging to assess the trustworthiness of counterparties.
The Personal Verification Subcommittee aims to address these issues by utilizing DID/VC technology to return the results of strict personal verification conducted by financial institutions to consumers, allowing consumers to manage and use the verification results at their own discretion. This will eliminate the need for repeated personal verification while simultaneously achieving privacy protection through minimal data provision and ensuring the rigor of verification results provided by financial institutions.
This approach, where consumers manage and use their personal verification results, is referred to as the “Wallet Model (tentative name)” in the “Interim Summary of the Guidelines for Personal Verification Policy” published by the Digital Agency in February 2024 and is drawing attention as a new approach to personal verification.
2. Use Cases to be Discussed in the Personal Verification Subcommittee
The Personal Verification Subcommittee will explore a scheme where consumers are issued a VC containing the results of personal verification conducted by financial institutions (hereinafter referred to as “Verified VC”). This Verified VC can be used as a means of verifying identity for specific transactions, such as opening bank accounts or applying for credit cards at other financial institutions, in accordance with the Act on Prevention of Transfer of Criminal Proceeds (hereinafter referred to as “Act on Prevention of Transfer of Criminal Proceeds”).
The establishment of this scheme could not only streamline personal verification procedures using Verified VCs but also enable financial institutions to provide identity verification functions to various businesses in the future, including start-ups and metaverse operators. This would facilitate secure and reliable peer-to-peer business transactions in the digital space, including the metaverse.
3. Future Activities
Starting in June 2024, the 11 participating companies of the Personal Verification Subcommittee will work together to develop a scheme compliant with the Act on Prevention of Transfer of Criminal Proceeds. Leveraging the expertise of IT companies participating in the WG dedicated to discussing this use case established within the Rule Development Subcommittee, discussions will also be held simultaneously to ensure interoperability in system specifications to create Verified VCs that are widely usable and convenient.
This consortium is open to all interested parties. If you share our vision and have interest in participating, please contact the DID/VC Co-Creation Consortium Management Committee (dvcc_post@tr.mufg.jp)
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