SSI and Payments Continued

SSI & Payments Continued

Wednesday 19G

Convener: Cam Geer, Timothy Ruff

Notes-taker(s): Cam Geer

Tags for the session - technology discussed/ideas considered:

Discussion notes, key understandings, outstanding questions, observations, and, if appropriate to this discussion: action items, next steps:

Discussion on how SSI technologies (DIDs / VCs) can be used to counter significant fraud problems in the exchange of value that exist to without upsetting the economics of the current payments landscape.

Kaitlin Asrow Fintech Policy Advisor at the Federal Reserve Bank of San Francisco, specializes in:

data portability

data privacy

artificial intelligence

confirmed for the groups assumption that in most cases today, money DOES NOT actually move.

The Fed flips bits in the ledgers between two member banks to “move money” at the time of settlement

offered to connect us to her Fed colleagues to further investigate SSI & Payments

Nick Thomas Payments relative to COVID

Brent Zundel designed sovereign token

Venu Reddy building payments rails & integrating SSI

Timothy mentioned the book as an influence

Identity is the New Money by David Birch

http://www.amazon.com/Identity-Money-Perspectives-David-Birch-ebook/dp/B00K86O66A/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=

Timothy also touched on:

Travel rule

current system requires a lot of PII needing to go with transaction details and are written in to the permanent record

Would be great to get ZKP on payment rails to get away from PII being exposed in the transaction record

US RTGS

real-time gross settlement system

TCH — bank of banks

Dave Huseby mentioned: Transparent systems in Seattle

Timothy identified the current problems in: Counter Party Risk & Surveillance

Dave mentioned this is Ripple’s business model in the crypto world

Venu Reddy settlement is where the risk is

Timothy described a current market problem:

APP fraud

$600 million pounds in UK

Authorized Push Payment (sender)

described as a spear fishing attack

f:raudster gets in between the two parties in a transaction because there is not a secure messaging connection

Other areas / opportunities:

real estate

escrow companies

tax fraud

no set of best practices in financial institution or market segments

Kaitlin also mention

pull payments where fraud is significant as an area to explore

Potential Solution open protocol based on verifiable credentials (vc’s)

Timothy proposed the name:

OCTP

open counter party trust protocol

an end-to-end encrypted messaging layer

mutual authenticated by the counter parties

could be two or more

the group agreed this is likely the basis to create best practices

key issue to investigate

what are examiners going to demand for KYC / AML rules

how does it connect back to payment systems KYC processes

$$ people be confident to meet needs of regulators

Alex Blom asked: How will this keep people safe?

—when to introduce this in the relationship?

— needs discovery

— hypothesis — unique to context / industry

Mike Lauder / Dave Huseby will think about this

assumption / security of private key

Liam asked Anyone familiar with RCS?

verified sender in protocol

the opportunity was described as : "DID Comm for Payments"

KYC regulation

multi party default

need to know basis

Will the protocol have pre-defined credentials?

what’s in them

what’s acceptable?

governance

transport

Kaitlin mentioned: Fed / banks take a risk based approach for KYC

it’s highly contextual

for examples immigrants

ID challenges

Tim summarized:

email and phone calls are the real competitors

move from what you know to what you have

can involve 3rd party providers

insure credentials

Payee has all risk

Dave Haseby offered: prime broker service

unchained capital — Utah

Christopher allen

AML

CFT

OFAC checks

Tim mention another topic:

micro ledger

two parties log of all exchange

fully auditable

Richard added: Z-Cash comments