Tokenization of the market that comes when we work out one problem: CEO Blackrock

If the vision is Larry Finka – CEO BlackThe world’s largest money manager is becoming a reality, all assets from shares to real estate and more will be traded on the Internet, on blockchain.

“Every asset – can be lectured,” Fink wrote in his recent Annual letter to investors.

Unlike traditional paper certificates denoting financial property, the tokens live securely on blockchain, allowing instant purchase, sale and transfer without documents and waiting – “Like a digital act”, he wrote.

Fink says there would be nothing for investment than the “revolution”. Think that round -the -clock markets and the trade settlement process that can be compacted in seconds from the process that can take several days today, with billions of dollars reinvesting back into the economy.

But there is one big problem, one of the technological tasks that stands in the way: the lack of a coordinated digital identity check system.

While technology experts say the FINK idea is not incredible, they agree that there are problems with cybersecurity to make it work.

Checking assets in the world AI Deep Fakes

Today it is not easy to check on the Internet what the person you interact with is a person with the prevalence of AI Deepfakes and complex cybercriminals, according to Christina Khalki, executive director of the Alliance of Safe Technology, an organization -oriented organization, access and payments. As a result, the presence of a single check system will be useful because it would be a cryptographic check that people are who they say.

“The industry (financial services) is focused on how to create a scales with zero strength for identification. You don’t trust anything until it is checked,” Hulka said. “The task is to collect all what technology to use, which makes it as simple and maximum for the consumer,” she added.

It is difficult to say exactly how a wide digital check system will work, but to support a fully tokenized financial structure, the system will at least be required to meet the rigid security requirements, especially those related to financial rules, as a rule, as a rule, the rules of customer laundering, Zulification Ramzan, Chief Director of Technology in Point Wild, Company Company.

At the same time, the system should be low friction and fast. Today, there is no shortage in the field of cryptography, especially from the field of cryptography, which can effectively tie a digital identity with a deal, Ramzan said. “Fifteen-20 years ago, this conversation would be unusual,” he added.

According to Ramzan, there were some successes with such programs. The Aadhaar Indian System is an example of a digital identity frame on a national scale. This allows the majority of the population to carry out transactions through mobile devices, and it is integrated both in public and private services. Estonia has an electronic ID system that allows citizens to do everything from banking to voting on the Internet. Singapore and the UAE also implemented strong national identity programs related to mobile infrastructure and digital services. “Although these systems differ in how they solve problems such as privacy, they all have a key line: a centralized government leadership that caused standardization and adoption,” Ramzan said.

Centralized Personal Data – This is a great goal for cybercriminals

While the centralized system solves one problem, storing personally identified information and biometric data is the risk of safety, said David Matthew, a strategic fraud and AML practice advisor in Datos Insights, which works with financial services, insurance and technology companies.

In particular, there were reports of data stolen from the Indian Aadhaar system. And last year, the Salvador government had personal data in 80% of its citizens stolen in the centralized identity system governed by the government. “Many security experts do not advocate a centralized security system because it is like a pot at the end of the rainbow, which every fraudster tries to take on hands,” Matteus said.

The US has long -standing benefits to decentralized systems for identity. On mobile devices, the identifier and fingerprint ID is not carried out by centralizing all this data in one place in Apple or Google, but keeping data in a safe module on each mobile device. “It is much harder if it is not impossible for the fraudsters to stole this data massively,” said Matthew.

Digital drivers’ licenses offer a cautious fairy tale

A significant coordinated effort will be needed to come up with a national identity system used to test identity.

Identity identity systems in the United States today are fragmented, Ramzan said, giving an example of state departments of road vehicles. “To move forward, we will either need a cohesive national strategy or a way of better identity coordination at the state and federal levels,” he said.

This is not an easy task. Take, for example, efforts that many states make to accept digital driver’s licenses. About a quarter of the states today, including Utah, Maryland, Virginia and New York, issuing licenses for mobile drivers, according to MDLconnection, An Internet resource from a safe alliance technology. In other states, pilot programs are in force, participated in the legislation or study the issue. But this endeavor is quite ambitious and has been held for several years.

In order to implement the national identity check, “a mass endeavor will be required and will require virtually every company that leads the business on the Internet to accept the state standard for verifying identity and authentication,” Matthew said.

Competitive forces are another question you need to fight. “There is an ecosystem of suppliers that offer decisions of identity and authentication checks that would not want a centralized system for fear of getting out of business,” Matteus said.

There are also significant data on the privacy that needs to be overcome. The States and the Federal Government must coordinate to resolve management issues, and this may push the “older brother” to which extent the federal government can monitor the activities of its citizens.

Many people have a “slightly allergic reaction”, if anything reminiscent of the national identifier, Ramzan said.

FINK pushes SEC to look at the question

The idea is not quite new for Fink. In Davos earlier this year, He said CNBC what wanted the SEC “To quickly expand shares and bonds.”

At work there is BlackRock’s own interests, and potential cost savings for the firm and many others that Fink spoke. In recent years, BlackRock has been involved in political battles and lawsuits over voting for a large number of shares that are stored in ESG. “We will never have to vote for the proxy,” Fink CNBC said in Davos, citing “BlackRock Tax”.

“Each owner will be notified of the vote,” he said, adding that it will reduce the cost of ownership and bonds.

From the Fink’s decision, it is clear to provide this issue of the visible placement in his annual letter – even if he became the third in the order he covered for both Policy Protectionism and grows the role of private markets – What he doesn’t let go. And what you need to make it a reality is a new digital identity check system. The letter is short, and BlackRock refused to clarify, but at least on the surface, the solution for Fink is clear. “If we are serious about creating an effective and affordable financial system, it will not be enough to defend the token.

Blockchain continues to develop and people learn to understand it better. Accordingly, initiatives are being held to think about how the US can achieve a broad identity check system, Huke said. There are technical ways to do this, but finding the right way that works for the country is a bigger problem because it should be interaction. “The goal is to get to the point if there is one way to check the identity in several services,” she said.

After all, there will be a turning point for the financial services industry, where it will become a business imperative, Hulka said. “The question is if, of course.”