California blockchain startup Netki announced the launch of their highly-anticipated Digital ID smartphone app at Consensus 2017 on Tuesday. The ID platform was designed to help people control their identities better, while at the same time giving anyone who needs a government-approved identification a feature-rich, blockchain-based, free solution that can be used anywhere.
The app uses the Hyperledger blockchain to provide a decentralized, open-source app, approved by governments, and fully Anti-Money Laundering (AML) and Know Your Customer (KYC) inclusive. “Once a Digital ID is created and validated, it can be easily shared via digital identity certificates that are legally valid in the U.S. and other jurisdictions,” said Netki’s CEO, Justin Newton.
“Netki Digital ID addresses various regulatory requirements, including the U.S. Department of Treasury's Travel Rule, which states that all four participants in a transaction (sender, receiver and each of their financial partners) must disclose validated identities before exchanging $3,000 U.S. or more.”
- Justin Newton, Netki CEO
In the same session, the Finance Minister of Aruba, Ryan Petersen, and the CEO of Barbados-based Bitcoin exchange and wallet service Bitt, presented a three-party joint announcement. Starting immediately, Bitt will be using Netki’s new app to onboard citizens in select Caribbean countries. Bitt offers a Bitcoin wallet app, which will hold and trade the Central Bank-issued digital currencies of these countries. “Central bank digital currency issuance is a viable solution to solve a number of problems in the payments system today,” Abed explained.
Bitt CEO Gabriel Abed later told Nasdaq that Barbados, Aruba, and the Bahamas have already signed up to issue Central Bank Digital Currencies on the blockchain using Bitt’s platform. Calling the region “one of the most underserved markets the world,” in terms of banking access and financial inclusion, the CEO says that “quite frankly,” the region is “going to leapfrog the developed nations now.”
The platform has been ready for months, according to Abed, and only needed Netki’s blockchain-based identity system. “With both Bitt and Netki working together,” Newton said in the announcement, “central banks in their role as regulators and banks will have all the necessary identity information required for transactions.”
“Digital identity is a fundamental requirement for compliant blockchains. We’re excited to do our part by delivering a production-ready service that makes blockchain safe for mainstream adoption — and makes identity as easy to manage as PayPal.”
Founded in 2014, Netki has been developing open source standards and digital identity solutions aimed at allowing financial service companies to meet regulatory compliance requirements. Building for both public and private blockchains, the company’s digital identity and wallet naming services are used by Bitt, IBM, and PWC Australia, the company revealed.
To use Netki’s platform, anyone can simply download the free app, use it to take a selfie, and then attach a scan of both the front and back of their state-issued identification card, which is then run through an authorization check. The whole process of making a legal, digital ID takes “only a couple of minutes,” according to the company.
Besides the easy onboarding of new customers, the app also provides validation and sharing of the digital identities with other users. Webmasters and other developers are currently able to use their open source API to validate IDs using the system, making the ID useful in a wide range of use cases. Pricing, Netki says, is charged to businesses and institutions “based on the number of certificates and complexity of validation.”
“Bitt joined forces with Netki as part of our ongoing initiative to bolster compliance efforts and provide an effective means for all people, including underbanked individuals to engage in the global economy through digital payments that are low cost, secure, easy to use and highly efficient.”
- Gabriel Abed, Bitt CEO
Meanwhile, Bitt’s mobile wallet app now comes with Netki integration, is available on both android and iOS, and handles several currencies including Bitcoin. The wallet showcases the company’s unique digital Barbados dollar. Bitt added the nascent currency last February, in conjunction with the Barbados Central Bank, claiming it as the first time a blockchain has “been applied to making already-existing currency digital.” The wallet, currency, and deal with the Central Bank have since been heavily promoted across the Caribbean.
Bitt’s wallet allows for payments, currency exchange, and as a payment processor for merchants. “The Bitt wallet works as easily as using email, and dramatically changes banking and payments for individuals and institutions in the Caribbean islands,” the company claims.
US correspondent banks around the world pulled out of the Caribbean region lasy July, in a historic de-risking move that has left many of the poorer countries in bad financial shape. “This prevents these local Caribbean banks from having access to foreign markets and also hurts merchants and customers who are unable to access foreign banks and financial institutions,” added Oliver Gale, President and co-founder of Bitt.
The Caribbean includes over 7,000 islands with 13 sovereign nations and 12 dependent territories, most of which cling to their own financial system, including currencies. Many of these peg their currency to the Dollar or Euro in an attempt to try to stabilize their value, and most of the Caribbean nations still struggle with low economic growth and the lingering effect of big banks de-risking.
As the big banks pulled out, Abed expected bitcoin to become a “part of everyday life in the Caribbean in around eighteen months, starting in Barbados.” Ten months later, he’s already got three different countries’ Central Banks in the region signed up to make this vision a reality, using his software.
His efforts began four months earlier, landing a record-setting investment from Overstock CEO Dr. Patrick Byrnet, totalling US$16 million, which was announced at a press conference with the Finance Minister of Barbados.
“Bitt has a vision for the Caribbean of frictionless mobile cash, beginning with central banks transparently issuing digital fiat which is then exchanged using a blockchain mechanism (with proper regulatory oversight).”
- Dr. Patrick M. Byrne, Overstock CEO