Telegram announced they have a new way for people to verify who they are online. The Telegram ID verification feature would allow people to confirm their identify with third-parties, without sharing personal information directly. Right now, if a person needs to confirm who they are, it is necessary to send copies of personal documents to whoever needs to comply with regulations.
Sharing your personal information online is risky. Companies that work with the banking system need to confirm who they are doing business with for legal reasons. However, legitimate financial institutions can be impersonated by scammers. Additionally, once a person’s personal information is out there on the web, it can be stolen from a database.
For now, the solution for verifying ID is to send a one-time copy of personal documents that are encrypted, and once identity is confirmed, the sensitive data is destroyed. It isn’t a perfect system, and Telegram thinks it can improve on user security.
The Telegram ID verification system would hold a user’s data in their cloud storage system, and when a person needed to prove who they are, they could use the Telegram ID verification platform to “vouch” for their identity. The third party would never see the personal details of the person who was being verified, and would trust that Telegram had done their due diligence.
Telegram ID Verification Addresses a Growing Need
Know Your Customer (KYC) protocols are becoming important in the world of cryptocurrencies. For a long time the idea of verifying your identity for crypto transactions was opposed by people who liked the anonymity that a platform like Bitcoin provided. Now that cryptos are merging with the established financial system, there is a need for crypto users to conform to much higher levels of regulatory compliance.
Tax and anti-money laundering laws put banks, and other financial institutions, under strict laws to prevent the movement of funds that could be used to nefarious ends. There is no shortage of criticism for the efficacy of this system, but regardless, they still have to follow the rules.
Read: Bitcoin and Money Laundering: Complete Guide to Worldwide Regulations
For example, if a crypto exchange wants to deal with regular banks for fiat transactions, they have to make sure they comply with all the laws and regulations that exist. Every country that has a developed financial system will require ID verification, but this becomes more complex when international transactions enter the picture.
In the world of cryptocurrencies, it is completely possible for a person who is a citizen of Hungry(random example) to use a crypto exchange that is in Taiwan, and a bank that is located just about anywhere. Sharing personal information across numerous jurisdictions isn’t without risk, which makes the new Telegram ID verification platform look like a forward-thinking idea.
Would “They” Trust an App?
The Telegram ID verification platform is likely to gain support from within the crypto and blockchain development space. Telegram is one of the best-known developers there is, and they have the money to make their products top-notch. The situation in the world of banking is somewhat different. Most countries require that financial institutions have direct access to customer ID documentation, so a third party verification service could run into some roadblocks, initially.
On the other hand, the world banking system is a big place. As the ongoing movement of crypto exchanges and mining operations to friendly nations has demonstrated, some places are far more open to embracing new technologies than others. If a Malta, for example, were to accept the Telegram ID verification as proof of customer identity, it would give Telegram’s platform an “in” to the global banking system.
The growth of cryptocurrencies is creating new challenges for regulators, who are balancing themselves between an existing financial system that is heavily regulated, and a new technology that isn’t easy to regulate. For the moment regulators have the advantage of the fiat banking system, which is the predominant form of economic interaction. If this ever changes, the regulatory authorities globally would be in a much more difficult situation when it comes to enforcing compliance.
