Financial Services Agency's "FinTech Demonstration Experiment Hub" Support Project Announces Demonstration Experiment Results: Verification of New Identity Verification Method Using Digital Certificates

MUFG Trust and Banking Corporation (President: Hiroshi Kubota, hereinafter MUFG Trust Bank) is pleased to announce the results of a demonstration experiment for a scheme to conduct identity verification based on the Act on Prevention of Transfer of Criminal Proceeds (hereinafter the "Proceeds Transfer Prevention Act") using digital certificates (Verifiable Credentials, hereinafter VC). This scheme was developed by the DID/VC Co-creation Consortium (Decentralized Identifier / Verifiable Credential Co-creation Consortium, 50 member companies* as of the end of March 2026, hereinafter DVCC) "Identity Verification Subcommittee" (established in June 2024). The experiment was supported by the Financial Services Agency's (FSA) "FinTech Demonstration Experiment Hub" as project No. 9*¹.

1. Overview and Results of the Demonstration Experiment

(1) Overview of the Demonstration Experiment

This demonstration experiment aimed to verify the feasibility and effectiveness of a "new identity verification method" that seeks to balance improved security with convenience by utilizing VCs managed and presented by users on their smartphones, based on identity verification results conducted by financial institutions under the Proceeds Transfer Prevention Act.

Two schemes were examined in this demonstration experiment:

① Utilizing a VC containing the results of identity verification conducted by a financial institution, combined with a VC recording the results of reading IC chip information from identity documents such as the My Number Card, as a method defined in Article 6, Paragraph 1, Item 1(g) of the Enforcement Regulations of the Proceeds Transfer Prevention Act (as of March 2025) (hereinafter the "Old (g) Method"). (Initial Scheme)

② Receiving and exchanging x.509 certificates issued by a certified business operator under Article 4, Paragraph 1 of the Electronic Signatures Act in VC format, to be used as a method defined in Article 6, Paragraph 1, Item 1(w) of the Enforcement Regulations of the Proceeds Transfer Prevention Act (as of March 2026) (hereinafter the "Method (w)"). (Final Scheme)

(2) Results of the Demonstration Experiment

This demonstration experiment indicated the potential for a "new identity verification method" that reduces the burden on customers during identity verification.

However, regarding the initial scheme (①), we received a response from the relevant ministries stating that it cannot be used as the Old (g) Method because it cannot guarantee the user's existence at the time of VC presentation.

Regarding the final scheme (②), we received a response from the relevant ministries stating that it can be used as Method (w), provided that financial institutions implement risk mitigation measures.

For details on the implementation results, please refer to the attached report:

"DID/VC Co-creation Consortium [Financial Services Agency FinTech Demonstration Experiment Hub Results Report]"

https://www.tr.mufg.jp/houjin/dvcc/pdf/houkokusho.pdf

2. Future Challenges for Social Implementation of VC

Moving forward, we will address detailed issues such as clarifying the division of responsibilities among businesses, developing business models, and designing incentives, including determining appropriate costs that Verifiers can bear based on cost-effectiveness, to realize and promote the widespread adoption of VC schemes and explore various VC use cases beyond just identity verification.

3. Future Developments

DVCC will continue to collaborate with relevant ministries and private industry organizations to confirm the legality and safety of new technologies, and to explore VC use cases and promote the realization and social adoption of VC schemes.

*1: About the Financial Services Agency's FinTech Demonstration Experiment Hub

In the "Future Investment Strategy 2017" (decided by the Cabinet in June 2017), it was stated that the FSA would take measures to facilitate FinTech-related demonstration experiments from the perspective of accelerating challenges for innovation utilizing FinTech. Based on this, the FSA established the "FinTech Demonstration Experiment Hub" to provide support to overcome the hesitation and concerns often faced by FinTech companies and financial institutions when attempting unprecedented demonstration experiments.

Through the Hub, FinTech companies and financial institutions can receive continuous support from dedicated teams within the FSA for each experiment, addressing issues they wish to resolve through experimentation, such as compliance and supervisory risks, and practical challenges related to legal interpretations that may arise when providing services to general users.

"Regarding the Establishment of the FinTech Demonstration Experiment Hub"

https://www.fsa.go.jp/news/29/sonota/20170921/20170921.html

"Decision to Adopt MUFG Trust Bank's Project Utilizing Digital Certificates for Re-use of Transaction Verification Results by the Financial Services Agency's 'FinTech Demonstration Experiment Hub'"

https://www.tr.mufg.jp/ippan/release/pdf_mutb/241223_1.pdf

【Appendix】

Participating Companies in the Demonstration Experiment (in Japanese syllabary order, titles omitted)

The demonstration experiment was conducted primarily by companies participating in the "Identity Verification Subcommittee" and the "Rule Development Subcommittee (Identity Verification WG)" among DVCC member companies.