Distributed Ledger PII Tokenization for Money Transfer Networks
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Solution Overview
Problem
Existing systems for secure money transfer transactions face challenges in protecting personally identifiable information (PII) data, as encryption alone is insufficient to prevent unauthorized access, and compliance with regulations regarding PII handling imposes significant financial and reputational risks.
Innovation Solution
A distributed ledger technology-based money transfer network is implemented, utilizing geographically distributed nodes (transaction, notary, observer, and oracle nodes) that tokenize user identities, allowing secure transaction processing and recording without exposing PII data, and employing smart contracts for regulatory compliance and authentication.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If PII data is stored and processed in traditional centralized systems, then transaction processing can be performed, but the risk of data breaches and unauthorized access increases
Solution Approach 1:
The patent extracts PII data from the transaction processing system by storing it separately in identity management systems and replacing it with anonymized identifiers in the distributed ledger. This separation ensures that even if the ledger is compromised, sensitive personal information remains protected in isolated, access-controlled systems.
Solution Approach 2:
The patent introduces anonymized identifiers as intermediaries between users and the transaction system. These identifiers act as mediators that enable transaction processing without exposing actual PII data, thus maintaining security while preserving functionality.
2Reliability
If PII data is encrypted to protect user information, then data security is improved, but authorized systems may inadvertently expose decrypted data
Solution Approach 1:
The patent removes PII data from the transaction processing workflow entirely, storing it only in dedicated identity management systems with strict access controls. By extracting PII from the general system, it eliminates the risk of inadvertent exposure during normal transaction operations.
Solution Approach 2:
The patent segments the system into distinct components: identity management systems that store PII with strict access controls, and the distributed ledger that processes transactions using anonymized identifiers. This segmentation ensures that even authorized systems cannot inadvertently expose PII during transaction processing.
3Adaptability or versatility
If PII data is distributed across geographic boundaries for regulatory compliance, then compliance capability is improved, but the complexity of data management increases
Solution Approach 1:
The patent extracts PII data from the distributed ledger and stores it in centralized identity management systems that comply with local regulations. This allows the ledger to be distributed globally for compliance while simplifying PII management through centralized, controlled access systems.
Solution Approach 2:
The patent uses anonymized identifiers as intermediaries that enable geographic distribution of transaction processing without distributing PII data. This maintains regulatory compliance while avoiding the complexity of managing distributed sensitive data.
Data Source
AI summary
Systems, methods, and computer-readable storage media configured to facilitate execution of transactions via a money transfer network are disclosed. During execution of the transactions, tokenized identity information may be utilized when exchanging transaction data between geographically distributed nodes of the money transfer network and the transactions are recorded to a distributed ledger maintained by the nodes. Smart contracts may be utilized to digitally sign transactions at various stages of transaction processing, such as at different stages of regulatory compliance validation and to authenticate the validity of the requested transaction (e.g., prevent double-spends). Utilizing tokenized identity information may reduce the likelihood that personally identifiable information (PII data) is obtained by or inadvertently provided to unauthorized third parties or systems. Additionally, the distributed ledger may record information in immutable records, thereby increasing the reliability and trustworthiness (e.g., for auditing purposes) of the data stored on the distributed ledger.