[2443] in cryptography@c2.net mail archive
"ABA" beomes root CA for financial services industry
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Fri Apr 3 12:43:53 1998
Date: Fri, 3 Apr 1998 08:31:17 -0500
To: cryptography@c2.net, dcsb@ai.mit.edu, dbs@philodox.com
From: Robert Hettinga <rah@shipwright.com>
A long(?) time ago, I thought it would be fun to create an Internet
Financial Certification Authority. :-). The idea went nowhere, of course,
and eventually I even retreaded the acronym IFCA into the International
Financial Cryptography Association :-). But, what, a year or two later, it
now seems that the ABA stole my idea. ;-).
Dr. Michael Froomkin, if I remember, noted at the time that he'd written a
legal article trashing the whole idea of a single-point, financial
certification authority as worthless, though I can't lay my hands on the
URL at the moment.
Back then, I was looking at more of a web-of-trust, "you're a member so we
trust you" model, like what happens at other trading "clubs" like the
diamond merchant's associations, or the NASD, and not nearly as grandiose
as the ABA plans here, trying to be the "root" CA for the entire financial
services industry, or even "a" root CA, as they claim further on in their
press release.
Since I think that hierarchical trust models are pretty much garbage (not
to mention the Utah digital signature statute ;-)), it'll be fun to see now
how long the ABA holds out before banks "certify" each other and make their
own, geodesic, trust relationships. If you don't have economies of scale,
you don't need central clearinghouses, so you don't need certification
hierarchies. As I've said before, on the net, monolithic, central
clearinghouses are a waste of time, even with book-entry settlement. You
still need a clearinghouse to keep your offsetting book-entries honest, of
course, but the economics of microprocessors on a ubiquitous global
internet gives you more, not fewer, trusted third parties to clear a given
book-entry trade, not to mention smaller trade granularity to begin with.
Microintermediation, in other words.
And, of course, with bearer settlement, it's even worse. :-).
Cheers,
Bob Hettinga
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From: Richard Hornbeck <rhornbec@COUNSEL.COM>
Subject: "ABA" beomes root CA for financial services industry
To: DIGSIG@LISTSERV.TEMPLE.EDU
>From American Banker's Association Web site (really):
http://www.aba.com/abatool/showme_rel.html?location=PR_030698ec.htm
Further congratulations to Digital Signature Trust, et al.
==============
ABA ANNOUNCES PLAN TO BECOME
CERTIFICATE AUTHORITY FOR FINANCIAL SERVICES
INDUSTRY
Believes move will accelerate electronic commerce
WASHINGTON, March 6 -- The American Bankers Association today
announced plans to become a root certificate authority for the financial
services industry.
As a certificate authority, ABA will provide digital certificates using
public key cryptography to financial service providers. When properly
implemented, this technology assures users of the authenticity and
integrity of Internet communications and financial transactions.
"Identification and security are critical to the success of electronic
commerce," said Donald G. Ogilvie, ABA executive vice president. "By
linking ABA's well recognized brand with public key cryptography, we
hope to enhance the industry's role in furthering electronic commerce."
The certificate authority proposal received ABA board of directors'
approval at its February 20th meeting. In the months preceding the
Board's approval, the ABA discussed its plans with bankers, regulators
and financial services trade associations. "We will continue to work
closely with all sectors of the financial services community, including
regulators and other trade associations, to best serve the industry,"
Ogilvie said. The service is expected to be operational in the second
quarter of this year.
ABA has historically served as a trusted third party for financial
services systems such as check routing numbers, the securities
numbering system, card identification numbers and standards. These
services were created and managed by ABA as early as 1911 and have
allowed all players to engage in efficient clearance, settlement and
commerce.
ABA will be partnering with Digital Signature Trust Co., an operating
subsidiary of Zions First National Bank, Salt Lake City, which was
recently granted OCC approval to offer digital signature and certificate
products.
The American Bankers Association brings together all categories of banking
institutions to represent best the interests of this rapidly changing
industry. Its
membership--which includes community, regional and money center banks and
bank
holding companies, as well as savings associations, trust companies and
savings banks--
makes ABA the largest bank trade association in the country. ABA can be
found on the
Internet at www.aba.com.
"The most important step in arriving at the right answer, is asking the
right question." Albert Einstein ("Al").
--- end forwarded text
-----------------
Robert Hettinga (rah@shipwright.com), Philodox
e$, 44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
The e$ Home Page: http://www.shipwright.com/
