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On May 4, the administration of US President Joe Biden released a national standards strategy for critical and emerging technologies. The strategy stated that the US would prioritize the development of standards in eight areas. Among the priority areas are “digital identity infrastructure and distributed ledger technologies, which are increasingly affecting a number of key economic sectors.”
“Distributed ledger” is synonymous with blockchain. A digital identity is “a unique representation of an entity participating in an online transaction,” according to a National Institute of Standards and Technology (NIST) document that is currently under review. A digital identity is “unique in the context of a digital service, but need not uniquely identify a subject in all contexts,” the document says.
NIST is a federal agency that coordinates state standards activities.
One obvious use of digital identity in economic sectors is Know Your Customer (KYC) and Anti-Money Laundering (AML), where blockchain solutions are being actively developed as regulators and law enforcement agencies demand stricter AML compliance in the US and throughout around the world in the crypto-currency industry.
Related: European Digital ID Wallet – Easy for Users or Data Privacy Nightmare?
Innovations such as zero-knowledge KYC verification based on the blockchain consensus mechanism for AML verification, credit scoring and similar information have been proposed. Passportization methods using person-linked non-fungible tokens (NFTs) have been deployed to enable off-chain identification.
The White House has released an updated list of Critical and Emerging Technologies (“CET List”), which will serve to inform a forthcoming strategy on US technological competitiveness and national security.https://t.co/xyesCD5PFP
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Privacy issues are closely intertwined with digital identity and are areas where the government and the cryptocurrency industry have yet to agree.
The White House said the goal of the strategy is to protect US consumers and the country’s role in setting international standards. The strategy will encourage investment in “research before standardization” in certain key areas, encourage private sector and academic participation in this research, invest in training, and ensure integrity and inclusiveness.
The Department of Treasury’s Office of Financial Research leads the government’s work on digital identity, digital assets, and distributed ledger technology across federal and international agencies.
