The body responsible for managing the implementation of the Legal Entity Identifier (LEI) has announced plans to develop a digital version that can be rolled out across multiple sectors beyond the financial services market.
The Global Legal Entity Identifier Foundation (Gleif) says that the creation of a cryptograhically verifiable credential containing the LEI, or vLEI, is in response to confirmed demand from the pharmaceutical, healthcare, telecom and automative sectors as well as financial services.
The body also claims that a successfully developed vLEI would create a "cryptographically secure chain of trust" that could replace the current manual processes needed to access and confirm a counterparty's LEI data.
To this end, Gleif is inviting "stakeholders from across the digital economy" to engage in a cross-industry development program designed to create the technical supporting infrastructure and credential governance framework needed to make the vLEI a reality.
The news has been greeted enthusiastically by the authentication industry. "The demand this will create for LEIs — and the impact it will have on adoption of self-sovereign identity — cannot be overestimated," said Drummon Reed, steering committee member, Trust-over-IP Foundation. "It will be a sea change for digital trust infrastructure that will benefit every country, company, and citizen in the world.”
The LEI initiative was originally set up in the wake of the financial crisis of 2008 when market participants found it difficult to track many of their counterparties as they sought to unwind various trading positions.
And while the project found it difficult to gain momentum in its early years, adoption has increased of late, as have the ambitions of Gleif.
In September, it launched an initiative which called on banks to assume a 'validation agent' role so that more counterparties would adopt the LEI, arguing that greater adoption would improve banks' onboarding processes as well KYC and AML compliance.
JP Morgan was announced as the first bank to take up the Gleif offer, in late November.