The Global Legal Entity Identifier Foundation (GLEIF) has published issuance and technical infrastructure models for the verifiable LEI (vLEI) system it introduced back in December 2020. The vLEI is a secure digital attestation of a conventional LEI and is designed to extend the use of the identifier and, ultimately, enable instant and automated identity verification between counterparties operating across industry sectors on a global basis.
While the LEI was introduced in 2012 to identify counterparties to financial transactions following the 2008 financial crisis, which proofed this could not be done quickly or easily, the GLEIF has extended use cases of the LEI and most recently set strategy that will make the LEI not only essential to smooth running of capital markets, but also the wider digital economy.
The vLEI is an element of this strategy and has been designed in the form of Verifiable Credentials in accordance with the World Wide Web Consortium’s (W3C) open standard Verifiable Credentials Data Model. This establishes GLEIF as the digital ‘root of trust’ and enables GLEIF to safeguard the integrity of the trust chain. Each vLEI must be issued by a GLEIF certified vLEI issuer – often existing LEI issuers – to a legal entity client that has an LEI. Once obtained, the vLEI can be used as a basis to issue additional credentials to members of the organisation.
To fulfil its global potential, the vLEI system will interoperate with all blockchain and distributed ledger consortia technologies to provide a network of networks. This will be achieved by using the Key Event Receipt Infrastructure (KERI) protocol as the basis of the vLEI’s technical infrastructure.
Stephan Wolf, CEO at GLEIF, says: “For the vLEI to become the de facto choice in digitised organisational identity globally, both its issuing system and underlying architecture have to embody GLEIF’s unwavering commitment to open systems and open data. The approaches we are laying out will enable the vLEI system to support any other blockchain or self-sovereign identity (SSI) network or system, while retaining the capacity to use them all. It will also be able to support cloud infrastructures.”
KERI as an open standard protocol being developed by the Decentralized Identity Foundation under the aegis of the Linux Foundation to provide a fully decentralised trust layer for the internet. It provides a cryptographic development framework enabling vLEIs to be anchored and verified without requiring an SSI, blockchain or distributed ledger utility network to operate. Using the KERI protocol, vLEIs can be created and used independently of any specific company or organisation, with the highest levels of security, privacy and ease of use. With KERI, GLEIF can provide universally verifiably authentic digital issuances of LEIs as vLEIs. KERI also enables GLEIF and the vLEI trust ecosystem to operate under GLEIF’s governance framework.
Sam Smith, founder of Prosapien, and creator of KERI, explains: “The vLEI backed by KERI enables securely attributed reputational trust transference across a network-of-networks of verifiable data registries. The vLEI will revolutionise trusted interactions through portable platform independent trust. It expands the internet trust graph to encompass every legal entity in the world.”
The vLEI technical infrastructure will enable the vLEI’s cryptographic keys to be generated and controlled directly by GLEIF, by vLEI Issuers and by vLEI holders, in accordance with legal requirements in many jurisdictions. Each party will maintain full, independent control and portability across systems. This allows GLEIF and its vLEI issuing ecosystem to take advantage of all blockchain, distributed ledger, SSI and other cloud-based public utilities to notarise cryptographic actions or transactions, maximising interoperability and flexibility in the vLEI system.
When complete, the vLEI will give legal entities worldwide the capacity to use non-repudiable identification data about their legal status, ownership structure and authorised representatives in digital business activities such as approving business transactions and contracts, onboarding customers, and submitting regulatory reports.
GLEIF invites software developers to engage with the vLEI programme’s existing stakeholders from industries including the financial services sectors, with a view to exploring opportunities to using vLEI identity verification in future applications, services and business models.