OpenBanking.nr

Transcript

all right I guess I'll uh kick it off uh hey everyone my name is Jack Gilcrest um from Mach 34 uh and we're going to be talking about open banking. NR which um let's just get right into it so what is open banking um most people haven't heard of this I hadn't heard about it until very recently um but it's basically like an open API for accessing bank accounts and this can be something that is driven by regulations sometimes it pops up uh by market demand but in general it involves um a third party that will get consent from a user to access a bank account this could be for like getting information like

historical balances or your current balance can also include actually initiating transactions so where is open banking actually um and this is a little bit out of date uh but it's the prettiest graphic I could find so um like for instance uh the Middle East actually has uh some very interesting stuff going on um the US uh will see in 2026 actually um the first uh Mandate of open banking through dot Frank it took forever but uh we we'll see that rolling out at the biggest banks in 2026 um smallest banks by the end of the decade the interesting stuff though right now is mostly in the

UK and the EU uh and we'll talk about why in a second actually we'll skip to here um essentially in the UK and the EU and this is uh kind of started pre- brexit um there is the psd2 Mandate payment services directive 2 and it basically requires every single Bank uh to open up an API that basically looks like this and you can see that pretty much everything you could want to get out of a bank uh is included either you know again the informational stuff or actually initiating transactions and we'll come back to what this means in a second but let's quickly

talk about some of the terminology specifically around the actors um there's an aspsp which is a fancy way of saying Bank uh there's third party providers which in this case would be us or any other Financial technology company that's going to integrate and then there's there's types of third party providers which are PPS and aisp um and aisp are cool you can get like you know again balances historical transaction data you could do some really cool ZK TLS stuff on this but it's not signed the PPS on the other hand it's it's almost like there's like proof of authority consensus over um Bank transactions in the UK uh essentially they're forced to sign uh the initiation of a a transaction and

this is legally evidentiary it's it holds a lot of weight so we can make very serious assertions based on those payloads and as you can see we can do all sorts of things we can do domestic payments we can do International payments we can schedule payments I think there's some more actually um for like recurring pay or standing orders right there yeah um pretty much any kind of financial product that you could want to construct out of a bank you pretty much have access to as long as it's account to account in this version so what are we actually doing um well first off we're signing data what what does that mean to sign the data who's signing this data um basically these are all eidas uh that's the

European identity authorization and Trust Services uh this is like passports uh identity cards companies have like corporate seals uh across the EU there's like this standard for identity and uh building Trust on top of signatures so the way that it works is that there's a regulated directory the open banking directory where the banks all the third parties they will all get to put their certificates in this directory and that's kind of like um certificate list um that you draw trust from so essentially you can check that if you're getting something from Barkley or revolute um this is actually what at least the government is asserting uh is Barkley's or revolute or whatever other

bank the third party provider so that's where the signature is coming from but what are we signing this this is a um payment initiation payload um and there's a lot of stuff in here um there's probably some cool stuff you could do with this stuff that's not uh highlighted with arrows but the things we care about are the domestic payment ID uh the status and the amount in currency and oh that should be creditor account not de dtor account but essentially what we want to do is we want to extract out like this bank account was sent this amount of this currency and that it was accepted or the settlement is in

process but it's been accepted um and with these four pieces of information we can essentially build an assertion that a bank says um you transferred this amount of money to this bank account and then we also want the payment ID as a nullifier so we can build a lot of really interesting things on top of this um but before we talk about that I'm going to talk a little bit about the downsides which are um mostly around centralization um the UK again brexit they have a separate license an FCA license the EU you need a psd2 license um in the Middle East actually uh every single country's Central Bank will issue their own license you can't even use like like we can use the sandbox in the

UK and the EU we can start developing anyone can start developing their own uh open banking application Middle East you have to go through the process of procurement of those licenses um the USA it's also still pretty unclear exactly what access will look like and these licenses um they have a lot of requirements one of the problems is um you know on top of all the legal expenses that go with actually getting one there's like a straight up Capital requirement you have to have some amount of money so it's not like uh you can just pop up and and do this there there are centralizing forces that kind of require you to do this more formally as well um the most interesting signed data requires kyc AML um you know you you

basically can like extend what you're doing from uh the banks like you don't need to be perfect but you need to be really good you still need to do kyc you need to file uh suspicious activity reports uh the kind of continuous AML surveillance it's all required you can't get a license without doing these things that doesn't mean that we can't do it in uh pretty privacy preserving way where we can you know make sure we know who's on ramping or offramp but not check where it's going but we do have to know who is transacting what that open banking. NR do uh a lot uh at least these are the things we've come up so with so far um I'm not going to talk about all of it if

we have time I can go back and talk about some of the other things um on- ramping is the most basic kind of demo that we came up with uh so we're going to show that one off first and uh we'll also talk a little bit about pcas um which are just basically automating commercial agreements so we're going to first walk through like the really basic flow of what this escrow looks like and if anyone knows ZK P2P um it's pretty similar actually um you've got a maker who has cryptocurrency and wants to off-ramp and you've got a taker who has Fiat and wants to on-ramp first off the maker is going to lock usdc or whatever their token is in that contract um you

know there's some extra Nuance there but in general they just lock the tokens there next through the open banking API you actually have to get consent with uh that the taker has to consent uh that they want to do this financial transaction so that's the first process it's two steps it's not a blockchain transaction you don't have to pay for it but it's multiple API calls once you've gotten consent you can actually go through and and initiate a bank-to-bank transfer um domestic International wherever you're going um you can send money from One bank to another this is nothing special right it's it's just a bank transaction except we get a signature this Bank through our API

provides us a signature that says that this happen and then we have to forward it back to them um which is totally fine and legal and we're allowed to do but technically it comes to us first and we give it to them and it's important to give it to them if we want to do privacy preservation like we want to make sure that um we don't know where they're going to send the actual money to necessarily we just want to give them the proof that this transaction happened and they do that they prove that they sent the maker the money and the escrow reads the amount out reads the right bank account which again is encrypted or at least committed to um and they get their tokens maker got Fiat taker got tokens okay so the Wi-Fi sucks I'm not even going to try this

um you can actually okay so another problem is also um the wallet we used um went through an upgrade in the past day so we weren't able to get that working but if you wanted to scan this QR and try it on your own um you could do that in like the next few days but instead I'm just going to run through a video of when it was working I don't know if I can full screen this okay so this is uh the app we have um we're going to start up by um our first account is going to be the maker um they have to get fake money okay so first off we're going to

actually set up our liquidity position um basically it's how much you want to deposit what currency you want uh bank account number which is again committed to so it's not in plain text um in a future version we would salt this as well because obviously you could reforce that um um there we go and now we've actually um if I set this back I'm trying to skip around a little bit um we've actually set up a liquidity position so this is again if you've seen ZK PTP it's it's very reminiscent we've um set up uh an opportunity for someone to come along pay this uh user and receive uh tokens from this up to 150 is how much 150,000

is how much is locked so this demo uses revolute so next we've got someone who has a revolute account um and again we could hook this up to every single Bank in the UK and the EU but we just use the revolute sandbox um and they're going to go ahead and go through the process of actually um withdrawing I guess we're going to withdraw 350 so we actually go through and authorize a payment through revolute so this this is the payment consent right and I think the CX is actually really clean um you know you just go straight into revolute authorize it through uh whatever process they have or any other bank now we've gotten the authorization

now we can initiate it and it initiates it actually on the back ends so first off you can see right here this is the revolute um dashboard you can see that the last transaction in this recording was 3 minutes ago we've initiated our payment and now new payment for 350b has gone through so we've actually hooked directly into the revolute bank this is not like the the venmo style thing this is the actual account and then we claim I'm not going to watch all this and yeah there you go uh so now we've basically demonstrated the process of of

how we went sent um money through the traditional banking system captured a signature and used that to drive an onchain payment that's really cool right uh we used an on or an offchain Financial rail to trigger an onchain action what we don't need to do is necessarily do that with money right we don't need to exchange funds for funds we basically can have uh these these interactions where people are using traditional Financial rails and triggering you know complex legal agreements commercial agreements without ever having to enter the world of cryptocurrency which for a lot of

businesses is a risk that they're probably not willing to take um and we've identified a bunch of commercial agreements that are like really interesting bills of lating letters of credit receivables invoice factoring stuff like that um but the demo I'm going to talk about really quickly uh is the bills of lading and bills of lading are essentially these Bare Assets with assets ass which entitle you to uh whatever's on a ship right so there's a process of escrowing it where you know like someone has the money someone has the the goods on the ship um this is an easy thing for us to disintermediate we don't actually need to lock up any money on chain we can just lock the uh bill of lading so this is going to look exactly

the same as the process of uh on ramping except instead of uh the maker putting some funds in the escrow contract both parties the buyer and the seller are going to agree that they're going to use this escrow contract uh they're going to lock a bill of leading up in this escrow contract you can you know put a a contract on a napkin if you want to so as long as the parties agree and everyone's happy we're good there same thing happens payment consent uh initiate the payment deliver the signature except now instead of uh the the buyer or the conse in this case um receiving tokens when they show the

signature what they're doing is they're proving that they pay the amount that uh is required to endorse the bill of lading over to the uh receiver of these Goods so essentially we can and this is one small case right but we can disintermediate the process of uh this commercial interaction which you know it's maybe couple of points on the entire deal deal but uh spread across the entire supply chain there's a lot of different pain points where people are really getting dinged and one thing we're very excited about is how we can basically use open banking as a way to drive um cost down settlement times down uh and make it as frictionless as

possible um but of course again that's that's just one of the few ideas um I will go back to this if there aren't any questions um we can talk about some of these other things but [Music] um yeah so this is a uh kind of not a white paper necessarily but like everything you would want to know about um open Banking and open banking. NR uh these are the actual circuits and the Aztec contracts for the escrow and if you're interested in following the progress getting updates or like trying to use it for yourself um this is the telegram channel so yeah open banking.

NR cool thank you so much Jack uh fun fact about Jack he was in our uh London Hacker House and I saw him break a one month keto fast with Indian food so it yeah very fun good Indian food good Indian food yeah uh any any questions from anyone otherwise I I can uh ask a few anyone have any questions in the audience uh I guess um building off of uh the panel uh where at the very end we're talking about go to market and how uh teams uh now working in this late stage of ZK need to think about go to market and building real products maybe you could talk a little bit I know you

talked a bit about the barriers um about uh how you guys are approaching that and if you're approaching that yeah yeah um well first off there's obviously a financial requirement so um you know we're pursuing different ways to address that I think what might end up happening is we'll see like um you know we're able to get up uh a psd2 license and we're able to start providing this service to uh ourselves as as a a crypto company but um as well probably it makes sense to open this up to other people other projects that don't really want to deal with all of the the multi-month uh multiple $100,000 uh requirements of

doing this um so first off I mean we need to get that done and I think that we could provide that out to people um beyond that I think uh we're still in the process as well of like identifying which which of these are most interesting um on- ramping is just like an easy demo for us to do um you know it's very clear that there's some amount of demand um whether or not it's enough to justify doing it on its own remains to be seen but um it makes sense to do that uh beyond that um again uh it's kind of a process of speaking with Partners seeing what's most interesting and uh also kind of following the internal model of what we

think is is most disruptive so so you've been working in uh this space for a while so um what has changed especially lately with building real products so you built uh ZM burst you're working on open banking uh has there been any kind of a shift more recent recently anything you've noticed any trends that you think are really important for especially new Builders to take advantage of um yeah I mean across the space especially ZK it's gotten a lot more mature obviously ZK VMS are getting very interesting um Noir as well um beginning of last year like I mean I've been doing Noir for a while but I was a little unenthused um uh the devx

was okay their the the support for like third party packag or the kinds of things you would expect out of a standard Library okay um and then you know halfway through the year maybe a little later um I mean I'm sure I missed a little bit of it but it seemed a lot better um the devx way better uh the the different tooling that you have available uh again just way better so the capabilities I think as someone who's not uh a Galaxy brained PhD are are much better now um again I mean I could chill Aztec but uh I think across the space as well um the the kinds of things you're able to do are just night and day compared to a year ago

even awesome does anyone have any other uh questions for Jack on open banking or otherwise I have maybe one last question of these you mentioned two is there one that you think will be potentially like the most interesting the most lucrative um I mean I lean towards pca's longterm um cuz that's just like a wild Market to to kind of like entirely disintermediate um International for like trade um I mean the the Fiat stable coin auditing one is interesting to me as well uh you know like we just kind of send money to like Circle or manium or

whoever and it pops out but you know it'd be interesting to have like real time uh auditing of like where money's going through Z ktls of the uh where they send their money to when you send it to them as well as having like State roots of the the PPS showing that your transaction was included and the exact fee was taking out um yeah I mean all of them all of them are interesting I'm not sure exactly which is the secret sauce but uh I think pcas are the one that we're most excited about yeah cool awesome thank you Jack [Applause]