GLEIF and uPort Test Verified Data Exchange in Financial Transactions
Switzerland & Paris — The Global Legal Entity Identifier Foundation (GLEIF) and uPort, ConsenSys’ digital identity platform anchored on the Ethereum blockchain, have partnered to support the process of exchanging verified data used in financial, commercial, and regulatory transactions. GLEIF is the G20-backed non-profit foundation tasked with promoting the use of legal entity identifiers (LEIs) as the global standard to unambiguously identify parties doing business. Together with uPort, GLEIF is testing how businesses can leverage the Ethereum-backed identity system to increase the efficiency of verifying business identities and persons acting on its behalf within the LEI ecosystem.
LEIs were established for the financial services industry as a way of verifying business information, such as an entity’s ownership structure, name and address, and registration details. A lack of transparency into business information can lead to fraud, market abuse, or even a financial crisis, and in this time of globalization, it’s increasingly important to be able to trust collaborators. GLEIF enables that trusted collaboration and oversees the centralized repository of LEIs, the corresponding reference data, and the accreditation of LEI issuing organizations such as capital market firms, government entities, central securities depositories, and stock exchanges.
LEIs are only as valuable as the number of businesses that trust them as a global standard, and in an effort to increase their use, GLEIF is leveraging its partnership with uPort to expand LEI information to include details about persons acting on behalf of a business. This allows businesses with LEIs to meet regulators’ compliance needs. However, collecting identity information on persons acting as officers within an organization raises a lot of challenges. There is no global identity standard for persons and there is often duplication and non-exclusivity of IDs. Data privacy laws limit the public exposure of natural persons’ data. GLEIF sees the potential of decentralized identity solutions to help solve these challenges and more, such as mitigating CEO fraud. This proof-of-concept (PoC) with uPort showcases how the GLEIF system can be designed to share information about officers required by regulators without the need to publicly expose private data.
uPort’s PoC encompasses both the issuance of verifiable credentials to prove legal entity identity and the identity of persons acting on behalf of a business, as well as the ability for these persons to cryptographically sign documents. Public and private organizations actively using LEIs in France participated in the PoC, providing critical feedback to the uPort team in how to develop a scalable production-ready digital verifiable credential issuance and verification platform.
The PoC was implemented as follows:
- GLEIF verifies INSEE, the national statistics bureau of France, as a LEI issuing organization (LOU) ) and uses uPort to issue a credential that acknowledges its role as an issuer of LEIs as well as digital credentials for legal entities.
- INSEE, upon verification of Societe Generale’s data associated with its status as a legal entity (addresses, subsidiaries, jurisdiction, etc.) and information about its corporate officers (name, role), issues it a credential containing the LEI.
- Societe Generale then, as a verified business, issues a role credential to a person acting in an official role.
- These persons now, armed with their digital credentials, are able to sign and submit regulatory filings to regulators, like the Banque de France.
Pelle Braendgaard, CTO of uPort comments: “GLEIF and uPort believe that decentralized identity solutions will allow persons acting on behalf of a company to interact with financial firms and regulators frictionlessly. Decentralized identity solutions will enable digital signatures of transactions or legal agreements online while preserving privacy. Furthermore, legal entities can easily verify that the person is legally permitted to act on behalf of the company.”
Stephan Wolf, CEO of GLEIF, comments: “GLEIF sees opportunity in introducing verifiable credentials to the LEI network, as defined by W3C standards, to extend the value of a LEI beyond just an entity to the officers or persons acting on behalf of the company. In addition, we believe that reliance on verifiable credentials can improve the current LEI issuance process by relying on encrypted VC standards.”
Dominique Durant, Deputy Director in the Directorate of the Chief Data Officer of the Banque de France: “Having already implemented blockchain to ensure the security of payment systems, the Banque de France welcomes the opportunity to experiment with the GLEIF another use case, that promises a more extensive use of the LEI as a unique identifier and may minimize the cost of security for the reporting agents.”
The PoC was first announced at the GLEIF Washington Forum on October 24th 2019, “Accelerating into a Digital Future: Simplifying Entity Identification for the Digital Age,” where regulators, technology providers and attendees engaged in discussions on how LEIs could be leveraged to enhance entity identification efficiency and prepare for a global digital identity ecosystem.
uPort is currently collecting feedback from users across the international LEI network and continuing to develop the production level product with additional features to support use case flexibility.
uPort is a user-centric identity and decentralized data platform anchored on the Ethereum blockchain. It delivers scalable decentralised solutions for digital identity, reputation, and multiparty trust. Built on interoperable standards, it offers a collection of tools and protocols allowing users to establish identities, send and request credentials, sign transactions, and securely manage keys and data. uPort is backed by ConsenSys, a software development and venture capital firm.
For more information visit: www.uport.me