Japan’s Second-Largest Bank To Use Soulbound Tokens for Identity Verification

Sumitomo Bank, Japan’s second-largest bank, intends to test Soulbound tokens for identity verification. Japan has made significant advances in web3 experimentation and research.

Sumitomo Bank, Japan’s second-largest bank, has announced that it will use Soulbound tokens to verify identities. Sumitomo Mitsui Financial Group (FG) is collaborating with Hashport for this purpose, as a result of a conversation that began in July 2022. On December 8, the two parties announced a business agreement.

The token will initially be used solely for identity verification, according to the bank’s plans. It intends to collaborate with other companies in order to assist them in engaging with their users via the token.

It demonstrates how the Soulbound token can be used to verify a user when they change jobs. Furthermore, it states that the token can be used to verify the individual’s background when they make the switch.

The launch of the Soulbound tokens is the first step in the two companies collaboration. The token will be issued on a trial basis by the bank. Sumitomo Mitsui will be supported by Hashport until March 2023.

The use of Soulbound tokens is part of the two parties’ attempt to establish a “safe and secure web3 economic zone.” Web3 is a sector in which Japan is very interested, and the government is eager to leverage related technologies.

Soulbound tokens made headlines earlier this year when Vitalik Buterin and others published a paper on the subject. The authors discussed a soulbound token in the paper, which represents a person’s identity in the digital world. It would essentially validate their credentials in order for them to participate in various activities.

NFTs have evolved into Soulbound tokens. They are one-of-a-kind, but they cannot be passed on. As a result, they have no real market value. They have several advantages, including the potential to reduce the risk of fraud in the cryptocurrency space.

The SMCG’s decision to test Soulbound tokens demonstrates that entities in Japan are eager to use web3. The Japanese government has encouraged the growth of this space in the hopes of attracting business and boosting the economy.

The Japanese Ministry of Economy has even established a web3 office solely dedicated to web3 policy. The Japan Digital Ministry will also establish a DAO to gain a better understanding of how technology works.

NTT and Nomura are two companies that are making strides. The former is Japan’s largest telecommunications company, while the latter is a major financial institution.