A fascinating new proposal for digital trust infrastructure was announced this week at the annual Sibos worldwide banking conference in Toronto. Sibos is organized by SWIFT, the Belgian-based cooperative that operates the global banking network (the network the banks themselves use to exchange money).

The proposal is called the Digital Asset Grid (DAG for short). Veteran financial technology journalist Jennifer Schenker of Informilo wrote this excellent article explaining the DAG and the unique role SWIFT could play in anchoring it.

In the words of Kostas Peric, head of innovation at SWIFT, “This innovation will bring bank-grade identity, privacy and security to the global exchange of any digital asset between any parties.” In essence, the DAG is how SWIFT and its member banks can expand from purely financial banking into “data banking” — the exchange of digital assets that are not money, but still need the same level of identity, privacy, and security, and trust as we currently require for the exchange of money.

For example, a corporation could use the DAG to conduct a fully electronic, auditable shareholder vote across hundreds of thousands of shareholders using the DAG. Any shareholder who was already “on the grid” (i.e., had a DAG account with a bank or other participating organization) would not need to register and authenticate with the corporation’s website to participate in the vote. Instead their electronic ballot would be delivered over the DAG to the shareholder’s verified account just like a wire transfer is delivered over the SWIFT network to a person’s bank account today. The completed ballot would be returned the same way.

The DAG is not just for companies. In fact one key reason it is called a digital asset “grid” (a term coined by SWIFT’s digital identity project team leader Peter Vander Auwera) is that, like an electrical power grid, it can be used to both consume and generate digital goods. For example, a professional blogger could use the DAG to syndicate blog posts to subscribing sites and automatically receive royalties directly back into her bank account based on the number of readers at each site, with a full audit trail throughout. All of this could be managed by a syndication app written by a third-party developer to use the SWIFT DAG API (Application Programming Interface).

Craig Burton, primary consultant on the DAG infrastructure, points out that this new platform would create an explosion of trusted data interchange apps just like iPhone and Android smart phone platforms have created an explosion of mobile apps. Electronic voting and blog syndication are just two of thousands of potential apps for a network where the identity, privacy, and security features required for trust are “baked in” and do not have to be built independently by every developer — the way every website needs to provide its own registration and login system today.

As a member of the team who worked with SWIFT to develop the DAG proposal (Connect.Me was invited to participate after we announced the Respect Trust Framework and won the Privacy Award at the European Identity Conference in May), I personally believe it could be the infrastructure-level solution to user-centric digital identity and privacy that the industry has been struggling to produce ever since the Microsoft Hailstorm and Liberty Alliance initiatives were launched a decade ago. It could be the basis for a personal data ecosystem that would be a sea-change in privacy and personal empowerment on the net.

I say “could” because, now that the proposal for the DAG is public, the really hard questions can be asked. For example, at the end of Jennifer’s article, she asked me: “How long do you think it will take to actually build the DAG?” I gave her my honest appraisal: “If SWIFT is ready and the banks are willing, building the DAG using a self-reinforcing digital trust framework can be done as fast as you can build a Twitter – about four years”.

But is SWIFT ready? Are the banks willing? Do they really understand the staggering economic and social potential of a global network that can do for the trusted exchange of any data what the current banking network has done for the trusted exchange of money?

Stay tuned.