More

    New White House Strategy Sets Standards for Blockchain and Digital Identity

    The Biden administration has unveiled a national standards strategy that focuses on establishing guidelines for “critical and emerging” technologies, including blockchain and digital identity.

    On May 4, the United States President Joe Biden’s administration released a strategy document outlining its prioritization of standards development in eight key areas. Among the prioritized areas are “digital identity infrastructure and distributed ledger technologies, which increasingly affect a range of key economic sectors.”

    In this context, “distributed ledger” is synonymous with blockchain technology. Digital identity refers to the unique representation of an individual engaged in an online transaction. The National Institute of Standards and Technology (NIST) is currently reviewing a document that further explains digital identity as being unique in the context of a digital service, but not necessarily universally identifying the individual in all contexts.

    NIST, as the federal agency responsible for coordinating government standards activity, plays a central role in this endeavor.

    One evident application of digital identity in various economic sectors is in Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, where blockchain solutions are being actively developed. Regulatory bodies and law enforcement agencies are increasingly demanding enhanced AML compliance within the crypto industry in the United States and worldwide.

    Innovative approaches, such as zero-knowledge KYC verification based on blockchain consensus mechanisms, have been proposed to facilitate AML verification, credit scoring, and similar information. Passporting techniques utilizing soulbound nonfungible tokens (NFTs) have also been deployed to enable off-chain identity accessibility.

    Privacy concerns are intricately intertwined with digital identity and represent areas where the government and the crypto industry have yet to find common ground.

    The objective of this strategy is to protect U.S. consumers and uphold the nation’s role in shaping international standards, as stated by the White House. The strategy aims to strengthen investment in pre-standardization research within the identified key areas, encourage private-sector and academic involvement in research efforts, invest in training programs, and ensure integrity and inclusivity.

    The Office of Financial Research within the Treasury Department leads the government’s initiatives on digital identity, digital assets, and distributed ledger technology in both federal and international agencies.

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    - Advertisement - spot_img

    You might also like...