Brazilian Payment System to integrate blockchain-based digital ID platform

The Brazilian banking system is going to deploy a blockchain-based identity solution powered by Hyperledger Fabric, Cointelegraph reported.

Co-developed by IBM and Camara Interbancaira de Pagamentos (or Interbank Payment Clearing House, CIP), the solution will be reportedly integrated into the Brazilian Payment System (SPB).

The SPB consists of the entities, systems and procedures related to the clearing and settlement of funds transfer, foreign currency operations, financial assets, and securities transactions. Its members are systems in charge of cheque clearing services; clearing and settlement of electronic debit and credit orders, funds transfers, and other financial assets; clearing and settlement of securities transactions; clearing and settlement of commodities and futures transactions; and others.

The Central Bank of Brazil (BCB) says that the SPB has a high degree of automation and increasingly uses electronic means for funds transfer and the settlement of other transactions, eliminating the need for paper-based instruments.

The blockchain platform, likely to be the first blockchain-based multi-institution banking solution, will allow authentication and verification of digital identities for users’ bank accounts via a user’s mobile phone and SIM card information along with other personal data derived from their smartphone.

Using this combined data, a secure ID will be generated, which will be recorded on a blockchain. Institutions would be able to use this ID to authenticate access credentials.

A source familiar with the matter told Cripto Facil that the in addition to protecting the safety of users, the application aims to prevent hackers.

IBM and CIP refrained from disclosing any details on the project but confirmed that they have been co-developing a blockchain solution. The details, according to Cripto Facil, will be announced at the upcoming Febraban CIAB, which will take place on June 11 and 12 in São Paulo.