Fintech startup, Nuggets, is a decentralised identity and payments incorporated platform acting as a reusable, interoperable ID.
It serves banking customers tapping the digital currency market, recently announcing it will be working with the Bank of England to create a privacy and identity layer for a digital pound. The platform will be leveraged in enhancing a new age of bank-enabled transactions using digital currency such as bitcoin and crypto, and a digital pound which is being developed.
The risks of fraud are still present in digital payments; as cryptocurrencies and digital payments continue to gain popularity as modern investment instruments, their inherent characteristics can increase the risk of money laundering, fraud, and cyber harm. The partnership will seek to open up new commercial opportunities adopted by banks and financial entities that combine digital payments into existing business models with the security protections provided by digital identity. The platform will develop a private and secure system to prevent tracking and payments being intercepted and safeguard an issue which is often debated by lawmakers over privacy.
The Bank of England said after a consultation in February that the development of a digital pound was likely in the forecast of innovation in the next few years, however the issuance of one would not be planned until at least 2025. Pilots and proof testing must taken place to check the privacy credentials of a digital ID solution and the digital pound that verifies users and safeguards their data from being shared.
The two parties in a transaction should not know each other’s identity which remains encrypted using zero-knowledge cryptography and hosted on blockchain. The startup’s name – Nuggets- is a nod to how data parts are secured and encrypted on the platform. The partnership will go ahead if the digital pound is realised with Nuggets appointed as technology partner. The Bank of England and the Bank for International Settlements (BIS) are prototyping the digital pound to rehearse and test a bigger endeavour of creating digital wallets to transact with retail CBDC.