Pakistan is currently facing a significant financial crisis
Financial institutions in the country are looking to use blockchain technology to stop money laundering
Pakistan is also working on its central bank’s digital currency
Pakistani Banks have planned to launch an electronic platform for know-your-customer procedures that will work nationally. The new blockchain system enables to exchange of the personal information of customers.
Waqas Mirza, the CEO of the PBA and Mohamed Aurangzeb, CEO of Avanza, signed the paperwork in Karachi.
A momentous occasion! 🤝
Pakistan Banks’ Association (PBA) and Avanza Group signed the Project Contract for Pakistan’s first Blockchain based National Banking Platform in Karachi on 2nd March 2023.#AvanzaGroup #AvanzaInnovations #AvanzaSolutions #demystifyingthefuture #PBAeKYC pic.twitter.com/2XMcxHoanL
— Avanza Group (@avanzagrp) March 3, 2023
Hence, the initiative will help banks to minimize onboarding costs for bank users. When financial transactions are recorded on the blockchain, they are automatically stored in an unalterable format.
Banks Of Pakistan To Use Blockchain For KYC Checks
The banks of Pakistan have planned to modernize their system by incorporating the latest technologies into a daily routine. A know-your-customer (KYC) platform developed by Avanza Group. Pakistan’s Bank Association (PBA) have agreed to work together to implement a KYC platform.
The country is constantly working and strengthening its efforts toward counter-terrorist financing and curbing money laundering.
The latter unites the companies that are experts in cutting-edge banking software, customer experience management system, blockchain technology and artificial intelligence. This would also increase the transparency in Pakistan’s existing financial system.
Pakistan’s Bank Association signed a contract of agreement with Avanza Group. The signing ceremony was held at the industry organization’s office in Karachi on Thursday. Several officials, including Chairman Mohammad Aurangzeb and the CEO of Avanza Innovations, Waqas Mirza, were also a part of the ceremony.
In the last few years, the State Bank Of Pakistan has also incorporated the modernized system and latest technology to fasten its work process. This time also State Bank Of Pakistan has created an electronic KYC system. To strengthen the country’s anti-money-laundering (AML) and counter-terrorism financing (CTF) infrastructure.
According to PBA, “in addition to strengthening AML controls, the deployment of this platform will bring about efficiencies at participating banks and improve customer experience”.
According to the association, Consonance, designed by Avanza Group, uses blockchain technology to enable banks to standardize and exchange personal details via a “decentralized and self-regulated network”, and that should happen with the customer’s consent.
However, banks can assess their new and existing customers accessing the data from KYC checks operated by other participating institutions.
The initiative will help minimize onboarding costs and improve customer experience when opening an account. This will depict “facilitating financial inclusion”, the PBA insisted.
Last year in March 2022, Reza Baqir, governor of SBP, was quoted as saying he sees few practical applications for cryptocurrency. He acknowledged that blockchain technology has the potential to be helpful, and it can easily benefit from dealing with various issues.
However, the SBP will issue licenses to electronic money institutions for CBDC issuance. Joining other countries in the competition to establish a central bank digital currency (CBDC), Pakistan signed new regulations to ensure the launch by 2025.
“These landmark regulations are a treatment to the SBP’s commitment toward openness, adoption of technology and digitization of our financial institutions”, stated Jameel Ahmed, Deputy Governor of SBP.