#230—On everyone’s mind: digital identity
From JPMorgan and Equifax to South Korea and the state of Maryland
Welcome to Yaka Stuff, our weekly newsletter that covers news, industry perspectives, and updates from the Hard Yaka ecosystem. Check out last week’s report here.
This week:
JPMorgan, Equifax, and South Korea explore new digital identity frameworks
Bluesky reveals details about its decentralized Twitter protocol
Sam Bankman-Fried’s stablecoin play
Ecosystem updates
1. JPMorgan, Equifax, and South Korea explore new digital identity frameworks
JPMorgan is joining a host of other established firms such as Microsoft in experimenting with new digital identity frameworks. They just published a video about the project, Onyx, which promises to bridge the gap to web3 and DeFi:
“As digital asset portability and ownership become more prevalent, you’ll need a digital identity that puts you in control over your identity credentials, enabling you to prove who you are, wherever you are by sharing only what you want to share. Imagine using only your credit score to take advantage of buy-now-pay-later options without revealing all of your personal information.”
Then, there’s Equifax. Here’s Venturebeat:
Assuring identity is difficult at the best of times, let alone in a decentralized, blockchain-driven Web3 economy. With enterprises and financial service providers still legally responsible for preventing fraudulent transactions and implementing adequate consumer protections, there’s a dire need for solutions to verify user’s digital identities.
In an attempt to address these challenges, today, privacy blockchain provider Oasis Labs announced a new partnership with Equifax to co-develop a Web3 ‘know your customer’ (KYC) solution, which will provide a blockchain-driven identity management and verification solution for companies adopting this new iteration of the World Wide Web.
The solution provides enterprises with an identity verification and AML compliance onboarding process, combining document-based identity verification, liveness checks and a selfie match to ensure compliance with international AML regulations.
Finally, South Korea is taking things into its own hands. Here’s Bloomberg:
South Korea plans to offer a digital identity secured by blockchain to citizens with a smartphone as it taps into the world’s most tech-savvy population to boost economic growth.
Smartphone-implanted IDs are among the latest emerging technology underpinning a digital economy that has expanded as more people work from home, make cashless payments and explore the metaverse.
Digital IDs simplify verification on the web, removing the need to photograph certificates or log-in via authentication codes sent by text. Instead, activities like applying for state benefits, transferring money or even casting a vote are just a pin or fingerprint away.
Bloomberg also has this nifty chart with data from a McKinsey report we shared back in 2019:
Meanwhile, in the US, states like Maryland are promoting the privacy potential of the digitization of our credentials. Here’s Bloomberg Law:
“You hand over a driver’s license for a lot of non-driving-related applications,” from opening a bank account to visiting a doctor’s office, said Christine Nizer, who leads Maryland’s Motor Vehicle Administration. Individuals lack control over whether their license data is copied or how it’s stored, potentially leaving their personal information vulnerable.
“A mobile driver’s license lets you control what information is shared and limit it to what’s required for that transaction,” Nizer said.
A person seeking to enter a bar, for example, could prove that they’re at least 21 years old without revealing their birth date, along with other details like their name and address, by presenting a QR code for scanning. Security checkpoints at airports, which are starting to test the use of mobile driver’s licenses in some US cities, also require only a few data points from a person’s license.
Relevant:
Oasis Labs and Equifax Turn to Blockchain to Verify Web3 User Identities
South Korea Aims to Boost Economy With Digital ID on Blockchain
States Rolling Out Digital Identity Cards Promise User Privacy
Austria Launches Digital Driving Licenses, its First Digital ID, as US States Align
Digital ID Enabling Anonymity Launched by Liquid Avatar for Web3
Turkey to Integrate Digital Currency with National Digital Identity System
2. Bluesky reveals details about its decentralized Twitter protocol
With Elon Musk at the reins, Jack Dorsey has even more time to focus on his passion project: a decentralized version of Twitter called Bluesky. Because it’s not just about credentials, people want social media portability as well.
Attributes of the AT protocol:
Account portability. A person’s online identity should not be owned by corporations with no accountability to their users. With the AT Protocol, you can move your account from one provider to another without losing any of your data or social graph.
Algorithmic choice. Algorithms dictate what we see and who we can reach. We must have control over our algorithms if we're going to trust in our online spaces. The AT Protocol includes an open algorithms mode so users have more control over their experience.
Interoperation. The world needs a diverse market of connected services to ensure healthy competition. Interoperation needs to feel like second nature to the Web. The AT Protocol includes a schema-based interoperation framework called Lexicon to help solve coordination challenges.
Performance. A lot of novel protocols throw performance out of the window, resulting in long loading times before you can see your timeline. We don’t see performance as optional, so we’ve made it a priority to build for fast loading at large scales.
Relevant:
Via Robert Parker—Jack Dorsey Unveils Bluesky Social, the Decentralized Twitter-Killer
Via John Simion—Announcing Zion v2 // a Web5 App
Via Vadim Slavin—Metaverse Interoperability Challenges and Impact
3. Sam Bankman-Fried’s stablecoin play
It’s all about digital identity and stablecoins, and SBF got the memo. Here’s Coindesk:
Bankman-Fried said in the interview "it is very likely" FTX will create a stablecoin, a crypto token whose value is tied to that of another asset. The exchange knows how to create one and is thinking about the best partner to work with, he said. He also hinted that an announcement will come soon.
However, in a follow-up tweet on Friday, Bankman-Fried noted that FTX is still determining a potential pathway.
"Eh to clarify: we are figuring out what we're doing on stablecoins; it could be anything or nothing, and could *or could not* involve partnerships, issuance, hula hoops, etc. (One of those is less likely than the others.)," he tweeted.
It’s also because he’s feeling the heat from Binance. Here’s Cointelegraph:
FTX CEO Sam Bankman-Fried (SBF) said the rise of Binance stablecoin Binance USD (BUSD) could spark the “Second Great Stablecoin War,” given how fast its market cap has surged over recent months.
Bankman-Fried’s recent comments come a month after Binance pushed ahead with plans to auto-convert a host of stablecoins supported on its exchange into BUSD on Sept. 6, — which has seen BUSD’s share of the total stablecoin market rise since.
BUSD’s share of the total stablecoin market has risen from 10.01% on Sept. 7 to 15.48% on Oct. 22, according to crypto data aggregator Coin Metrics.
…
SBF added that as BUSD continues to edge its way into the market as the big centralized players fight for dominance, there will likely be more projects sprouting up in the “non-fiat-backed-stablecoin space” also.
“It’ll be interesting to see what emerges from the post-Luna and post-DAI-holding-USDC. My guess is that it will be something interest bearing or otherwise with some upside,” he added.
Relevant:
Crypto Exchange FTX Is Working on Creating a Stablecoin: Report
A Stablecoin's Rise in Market Share Has Ignited the ‘Second Great Stablecoin War’
Kazakhstan to Test National Digital Currency on BNB Chain, Binance CEO Zhao Says
The CFPB’s Rohit Chopra Wants an Open Banking 'Race to the Top'
4. Ecosystem updates
GlobaliD launched a non-custodial wallet attached to a digital identity:
This also marks one of the first times a digital identity is attached to a non-custodial wallet solution.
Today, non-custodial wallets operate in a regulatory gray zone since they aren’t tied to an identity, which ultimately limits their real world usability. By baking in privacy-preserving digital identity, GlobaliD’s non-custodial solution has everything it needs to become fully compliant in the context of existing regulatory frameworks.
What that means is the GlobaliD Wallet has the potential to serve your most common banking use cases such as storing funds, getting paid, and, of course, shopping online — all while giving you full ownership and control of your identity, your data, and your funds.
The new GlobaliD Wallet is also your bridge to the next chapter of the internet — what people are calling web3. This initial version is currently built on Solana, but Ethereum support is on the way — stay tuned. The eventual goal is support for all the major blockchains, all in one place. That means you’ll be able to seamlessly transfer funds between the traditional banking system as well as the metaverse.
Hard Yaka also invested in Arf, a global settlement platform:
The firm intends to use the cash injection to further develop its blockchain-based technology to provide global treasury management and working capital credit lines for financial institutions and licensed money service businesses alike operating in the cross-border payments industry.
"We are delighted to see prominent Web3 and institutional finance investors validate our vision and join forces with us," said CEO Ali Erhat Nalbant.
"Arf's technology sits right at the center of cross-border payments evolution. This funding round will help us scale Arf to free up trillion dollars worth of locked working capital in the industry," he added. "We'll keep leveraging digital assets and Web3 technologies to fuel the transformation in global finance in a fully compliant way."
Relevant: