The vLEI: digital proof of identity for businesses

In an increasingly digital world, where the integrity and credibility of information is critical, trust services play an increasingly important role. One prominent example is the Verifiable Legal Entity Identifier (vLEI). But what exactly is this concept and how does it work?

The development of the Legal Entity Identifier (LEI)

The Verifiable Legal Entity Identifier (vLEI) builds on the Legal Entity Identifier (LEI), which since 2012 has served as a unique identifier for legal entities such as companies or organisations. In the same way that individuals have identification documents to confirm their identity, an LEI is assigned to a company or organisation to uniquely identify it.

The vLEI takes this a step further by incorporating additional layers of trust and authentication methods. It enables the digital verification of the identity of an organisation and of individuals occupying specific roles within that organisation (e.g. directors or authorised signatories). This verification takes place during digital transactions, helping to improve security and efficiency across multiple business domains.

A concrete example of the use of vLEI can be found in the area of supply chain management. For example, if a company manufactures food products and works with various suppliers to obtain the necessary components, vLEIs can be used. Each supplier is given a vLEI, allowing the company to verify the supplier's identity and ensure it is a known and trusted partner. This minimises the risk of fraud and counterfeiting in the supply chain and ensures the quality of the products supplied.

The process behind the vLEI

The vLEI is based on digital certificates issued by accredited certification authorities that confirm the identity of a legal entity. These certificates contain information about the organisation to which the vLEI belongs and serve as a trusted means of identification in digital transactions. When applying for a vLEI, an organisation must provide proof of identity, which is verified by the issuing Certification Authority. Once the identity is confirmed, a digital certificate is issued and made available to the organisation. Accredited vLEI Issuing Authorities play a critical role in the issuance and oversight of vLEI certificates. They ensure that only legitimate organisations receive and use vLEIs, thereby contributing to the integrity of the entire vLEI ecosystem.

The Global Legal Entity Identifier Foundation (GLEIF) plays a central role in the certification and oversight of vLEI issuers, known as Qualified vLEI Issuers (QVIs). GLEIF acts as an oversight organisation, ensuring the integrity of the entire vLEI ecosystem. To operate as a QVI, organisations must undergo rigorous qualification procedures established by GLEIF. These procedures include assessments of technical competence, legal requirements and security standards. Only when an organisation meets these requirements and is certified by GLEIF can it issue vLEI certificates, thereby helping to authenticate organisations. GLEIF continuously monitors the activities of QVIs to ensure they meet the required standards and maintain the integrity of the vLEI ecosystem. Through rigorous certification and monitoring, GLEIF ensures that the vLEI can be used as a trusted and reliable identification mechanism in digital transactions.

How vLEIs are issued

1. Application to a QVI: An organisation submits an application to a qualified vLEI issuer.
2. Identity Verification: The QVI performs various checks to ensure the legitimacy of the organisation.
3. Issuance of vLEI certificate: Upon successful verification, a digital certificate is generated and issued to the organisation.
4. Publication and monitoring: The issuance of the vLEI certificate is published on the GLEIF website, while the QVI regularly monitors the LEI status of its clients to ensure the accuracy and validity of the information.

Future outlook: Potential and Expectations

The applications of vLEIs span a variety of industries and sectors. In addition to supply chain management, vLEIs can be used in areas such as financial services, healthcare, real estate and public administration.

• In the financial services industry, for example, vLEIs can help identify customers and business partners during transactions and comply with regulatory requirements.
• In healthcare, vLEIs can help verify the identity of medical institutions, pharmaceutical manufacturers and other entities, thereby improving the safety and efficiency of healthcare services.
• In real estate, vLEIs can be used to verify ownership and in real estate transactions.

Because of its versatility and ability to ensure the integrity and trustworthiness of organisations, the vLEI has the potential to play a significant role in multiple use cases.

Looking ahead, the vLEI is expected to gain further prominence as the demand for secure and trusted identification mechanisms in digital transactions continues to grow. New technologies and standards may extend the functionality and applications of vLEIs, while regulatory developments may drive their integration and use across different industries.

In summary, the vLEI plays a critical role in verifying and authenticating the digital identity of organisations, thereby contributing significantly to security, efficiency and trust in the digital economy. Its potential to transform the way organisations interact in digital environments could make it a central element in the digital ecosystem of the future.