Japanese financial institution Sumitomo Bank plans to put Soulbound coins through their paces for use in personal identification. The country of Japan has made great strides in the development and testing of web3 technologies. Identity verification using Soulbound tokens was recently revealed by Sumitomo Bank. In order to provide decentralized protocols, Web3 makes use of blockchain technology and a wide variety of crypto currencies. The finest Web3 currencies make advantage of those innovations in order to offer a wide variety of applications.

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What are Soulbound Tokens?

For those unfamiliar, Soulbound Tokens (SBTs) are virtual identification coins which stand in for the qualities, characteristics, and accomplishments that make up an individual or organization. It is impossible to transfer SBTs between different "Souls," that stand in for blockchain identities or wallets. In May of 2022, Vitalik Buterin, co-creator of Ethereum; Puja Ohlhaver, an attorney; and E. Glen Weyl, an economist as well as societal technologist, suggested the idea of Soulbound Tokens (SBT). The whitepaper "Decentralized Society: Finding Web3's Soul" explains how Soulbound tokens (SBTs) may serve as the credentials we use in our daily lives and how a completely decentralized society (DeSoc) managed by its people is possible. A person's identification is represented by a token that cannot be transferred between users and is stored in a blockchain technology.

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What Do You Mean by Web3?

Decentralization, blockchain technology, and token-based economies are just a few of the ideas proposed for Web3, a proposed third generation of the World Wide Web. Innovators as well as journalists have drawn parallels between it and Web 2.0, with the former claiming that information and media are concentrated in the hands of a few large corporations (or "Big Tech") that control much of the internet. Gavin Wood, co-founder of Ethereum, popularized the phrase "Web3" in 2014, and by 2021, crypto fans, major tech businesses, and VCs were all showing an interest in the concept.

More on Soulbound Tokens

The only way for blockchain and its manifestations to reach the general public is if technology can be effectively used to solve problems that ordinary people face on a daily basis. The incorporation of blockchain technology into government processes has many real-world applications; for example, when submitting tax returns online, you'll be prompted to enter your national ID or in the shape of a Soulbound Token issued by the government and verified using a wallet of your choosing. Through the year 2025, it is the most probable outcome. The phrase "Soulbound Token" may conjure images of a mashup between occultism, science fiction, as well as the financial world. Yet it's definitely among the blockchain's biggest intriguing features! 

Sumitomo Mitsui Group v/s Hashport Group

Collaboration between Sumitomo Mitsui Financial Group (FG) and Hashport started in July 2022. Both companies made the announcement of their partnership on December 8. The bank intends to first employ Soulbound tokens just for identification verification. The company plans to work with others to help them utilize the token to better interact with their customers. In order to investigate the "practical" use of SBTs for its customers, SMBC has teamed up with digital asset business HashPort, as per a recent release. The SMBC Group, with the HashPort Group's help with technical aspects, will issue test SBTs as part of the first research phase. For now, know that it will expire in late March of 2023. Since July 2022, the SMBC Group and the HashPort Group have been discussing the new business, with the goal of creating a safe and secured Web3 financial area.

In the prosecution's second stage, participants would test out various contexts in which SBTs might serve as evidence of past conduct and employment. Additionally, research papers proving SBT's value in combination with businesses seeking to manufacture and distribute supporter coins would be produced via experimentation. The group is working together to study SBTs to see how they might be used in real-world settings such as neighborhoods, workplaces, information exchanges, as well as DAOs. SMBC claims that its collaboration with HashPort would make it easier for people in Japan and elsewhere to use blockchain technology and non-fungible coins.

The SMBC Group is doing important work to promote the growth of the Web3 market in Japan by collaborating with the HashPort Group to study SBTs with the goal of putting their findings to use in the coming years. To further promote the global expansion of the token industry, the two companies will also discuss the possibility of entering the content business linked with NFTs and building up the infrastructure of the Web3 economic zone.

Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.