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HSBC's Polygon-Powered Decentralized Identity


The Internet is undeniably a remarkable technological achievement. However, it wasn't initially designed with the concept of digital identity in consideration. Web3 has long provided an alternative to the conventional practice of managing one's own passwords or entrusting valuable data to prominent tech giants. Interestingly, one of the world's most significant banking and financial service institutions is now embracing the cause of decentralized identity (DID).


During the Hong Kong FinTech Week, Ben Chodroff, the Head of HSBC Lab, graced the stage with a live demonstration of a DID prototype utilizing Polygon ID. This innovative protocol stands as a self-sovereign, decentralized, and private identity solution tailored for the next phase of Internet evolution. A concise summary of this presentation is provided below.


Proving one's online identity has always been a cumbersome and time-consuming process, often fraught with concerns regarding privacy. DID, however, presents an elegant solution by offering individuals a singular, secure identity that can be universally employed across a diverse range of platforms and applications. It also empowers users by granting them control over their own identity, enabling them to selectively share information and decide with whom to share it.


Polygon ID is a comprehensive set of DID tools that places strong emphasis on privacy, decentralization, and user data autonomy. It equips developers with the means to facilitate the secure exchange of verifiable credentials, which are fortified by cryptographic proofs, including zero-knowledge proofs, and the blockchain. Notably, Polygon ID aligns with the open-source identity standard of the W3C and seamlessly integrates with both public and private ledgers. These qualities prompted HSBC's selection of this solution.


HSBC Labs is actively working on a DID solution for internal account creation, which relies on the capabilities of Polygon ID. When a customer initiates the process of opening an HSBC account, the bank conducts a Know Your Customer (KYC) check and generates a verified credential. This credential can subsequently be utilized for various transactions, including accessing an HSBC account, making purchases, applying for loans, handling carbon credits, and much more.


This HSBC ID has the flexibility to draw upon a multitude of identity issuers, ranging from governmental entities and credit agencies to telecommunications providers and utility companies. Through this customer identity wallet, users are empowered to provide their personal information, such as their name, date of birth, address, passport number, and more. This facilitates the establishment of trust, verification of eligibility, and the completion of transactions.


Ben expressed his contentment with the Polygon ID solution, highlighting its open-source nature, adherence to open standards, and compatibility with both private and public Ethereum blockchains. These attributes cater to both traditional financial practices and the emerging landscape of institutional decentralized finance. He also noted that the wider adoption of open standards for decentralized identity by regulated financial institutions will contribute to creating a more secure and efficient customer experience.


Reference:

Why HSBC is Building a Decentralized Identity Solution With Polygon ID (no date)

polygon. technology. Available at: https://polygon.technology/blog/why-hsbc-is-building-a-decentralized-identity-solution-with-polygon-id?(Accessed: 3 November 2023).







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