Cambridge Blockchain, one of a growing number of startups applying blockchain technology to a thorny problem of modern banking, namely the need to both collect customer data and respect customer privacy, is developing a digital solution for managing and sharing personal information.
Billed as an "identity platform," the product is designed to allow businesses and consumers to store and exchange information while staying on the right side of regulations such as the European Union's General Data Protection Regulation, which sets strict limits on what information companies are allowed to hold on their customers.
The platform's development, announced Monday, is a joint effort between Cambridge and LuxTrust, an established firm that is already managing digital identities for the entire individual and corporate population of Luxembourg, according to a news release.
Financial institutions using the platform will be able to bring new customers onboard faster and perform know-your-customer checks when required. The platform will even host data pulled from health records and Internet of Things devices.
"LuxTrust is committed to providing better identities for people and things," Pascal Rogiest, LuxTrust's CEO, said in the release. "Working with Cambridge Blockchain allows us to augment the scope of identities, including any attributes, and will enable users to share personal data [while] fully respecting the increasingly stringent European regulatory framework."
A key piece of the platform will be Cambridge's software, in which each individual holds his or her personal data in a private store and the blockchain holds proof that the data is valid. Such proof could include picture ID. A bank can refer to the blockchain to verify customers' identities, but the information held there can't be used to falsify personal data.
Cambridge raised $2 million in February through a convertible note, a type of short-term debt—later converted into equity—that is a popular means of financing startups. The additional capital was intended to hasten the deployment of its blockchain-based software to financial institutions.
Among the investors in the note was Digital Currency Group, a company that owns stakes in dozens of bitcoin and blockchain startups. At that time, Cambridge was said to have already landed its first commercial partnerships, but no names were given. LuxTrust is the first to be announced.
"Luxembourg is the ideal place to launch this platform," Matthew Commons, the CEO of Cambridge, said in a news release Monday. Luxembourg is known, depending on your point of view, either as a country with one of the world's strongest commitments to financial privacy or as one of the world's biggest corporate tax havens.
LuxTrust's existing services, such as identity authentication and signature and document management, will be combined with Cambridge Blockchain's own enterprise software, Commons added, allowing the companies jointly to deliver "the future of digital identity for Europe and beyond."
Cambridge's partnership with LuxTrust is set to be formally announced Monday in Washington at the K(NO)W Identity Conference. Travis Jarae, the host of the conference, described the partnership in the release as "a prime example of the transformation taking place across the identity industry," in which established companies are adopting the innovations of regtech startups.