A new solution has been launched in order to make blockchain-based transactions more secure for banks and other institutions.
Financial institutions have “implemented mature key management solutions to secure data, business applications, and transactions.” With the introduction of blockchain and digital assets, existing key management technology can’t be used “to provide the same level of protection and compliance mandated by regulation and security.”
To work around these limitations, enterprises have “bypassed robust security processes and put themselves at risk by storing blockchain keys on employee laptops to sign digital asset transactions.”
Overledger Authorize solves the problem of “how banks and institutions can manage and integrate digital asset and blockchain private keys with their existing enterprise key management systems, enabling end-to-end authorization of transactions seamlessly across existing systems and blockchains.”
Authorize has recently been “stress-tested and proven to work in Project Rosalind, a flagship central bank digital currency experiment led by the Bank of England and Bank for International Settlements with banks, institutions, and industry participants. We’re now making the technology more widely available.”
In blockchain, a private key is “an alphanumeric code that fulfils a similar function to a password.” These keys are used “to authorize and validate transactions, rendering them irreplaceable for accessing funds stored on a blockchain.” However, issues can arise “due to a range of factors, including human error, theft, and malicious attacks.”
Banks traditionally use key management systems “that are unsuitable for blockchain, and connecting these systems to blockchain would be a huge task.”
Authorize addresses this issue by “integrating with existing enterprise key management systems and seamlessly managing the signing of blockchain transactions and key generation.”
When a business application or workflow initiates or signs a transaction, Authorise coordinates the “necessary authentication, authorization and verifications with existing key management systems to securely deliver the transaction to the destination blockchain.” This relieves banks from the risk of storing keys on “an employee’s laptop and the burdensome task of configuring and handling transaction signing for each network.”
Generating and storing cryptographic keys “is a risky and complex business, susceptible to cyber-attacks, user mismanagement, and a range of technological implications for transaction signing. Until now, blockchain solutions had struggled to match the security and convenience demanded by traditional banking transactions.”
Founder and CEO, Gilbert Verdian, comments:
“Blockchain technology has the potential to revolutionize banking, but we cannot unlock its true potential without robust and future-proof solutions for cryptographic key management and transaction authorization.”