Blockchain for Banking News

Japan’s JCB publishes white paper on blockchain confidentiality, privacy


Last year Japan’s largest credit card provider, JCB, partnered with startup LayerX for blockchain solutions for B2B payments. Today they jointly published a paper on blockchain privacy and confidentiality. 

The focus is on confidential computing, which enables companies to share data privately to make calculations. This lets companies share calculation results on underlying data they can’t see. The data sharing is done off-chain, but blockchain might be used for logging.

Confidential computing

One of the most common examples of confidential computing is to assess creditworthiness, where someone might allow their transaction data to be used. This enables calculations to assess the ability to pay without sharing the transactions themselves. That way, the credit assessor can’t actually see who is being paid. 

An interesting potential application identified by LayerX is anti money laundering (AML) procedures. A key disadvantage of conventional payments compared to blockchain native payments is that banks can only see the transaction they’re involved with. They can’t see where the money has come from. Currently, banks tend to share blacklisted accounts. But confidential computing may hold some promise.

The use cases highlighted in the paper are transaction tracking, AML, using payment history from multiple companies, and programmable money. In the latter case, the example given was telematics, in which the insured’s driving behavior determines the size of the premium to be paid. Safer driving makes for cheaper insurance. Telematics can be somewhat invasive, logging everywhere someone goes. Instead of sharing the person’s travel details, it would be possible to calculate a driver safety score by using confidential computing.

LayerX has its Anonify technology, which uses Intel’s SGX chips as a secure enclave. The enclave is a Trusted Execution Environment (TEE), where calculations are run within a black box-like environment. The TEE is ringfenced from the rest of the operating system. Data that goes into the black box is encrypted, and it’s only temporarily decrypted for the calculations.

Netting solutions?

When JCB and LayerX first announced their collaboration last year, the target was to net bilateral payments for SMEs. This was not mentioned in the whitepaper. A month ago, a Singapore startup OneHypernet announced a cross border netting solution for payments that also uses confidential computing. The multilateral netting project combines two technologies from R3, its Corda enterprise blockchain and Conclave confidential computing offering.

There have been various initiatives looking to combine confidential computing and blockchain. The Enterprise Ethereum Alliance issued some Trusted Compute SpecificationsHyperledger Avalon aims to implement some of those specifications, and Visa also has its LucidiTEE solution.

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