Circle, co-creator of USDC, one of the leading stablecoin settlement layer for this industry, recently launched a decentralized identity management called Verite. Verite is an API-based framework that allows 3rd party credential authenticators to provide their expertise on investor/user credentials and ultimately, these credentials to be managed on-chain aka on investors Web3 wallets (Coinbase Wallet, MetaMask, Phantom, Trust, Island etc).
https://www.circle.com/en/verite
Philosophically, identity management is critical in the functioning of the US and global capital market, especially in the context of Web3 and the premise of anonymity and/or self-sovereignty of a user’s own data, credentials and investments because credential checks such as know-your-customer (KYC), know-your-business (KYB), anti-money laundering (AML) and Accreditation (accredited investor check and status) and each of each credential markers comes with different duration and re-check implication.
After all, you ask 10 people, they will highly probable given you slightly different definition to the term “Web3”:
- is it a marketing/PR term arguably important for mainstream adoption of complex, abstract, foreign product like ARPANET vs INTERNET
- and/or is it the self-sovereignty of personal data and wealth
- and/or consensus trust focal point aka protocol layer consensus (then you have the protocol layer >> application layer >> database layer >> authentication layer >> UI/UX layer)
- and/or interoperability of data across different platforms instead of buying a esports gaming skin in Garena or Steam or Counter Strike or DOTA 2 or Runscape, you can now interoperable that across other games
- and/or like founder of Ethereum puts it emphasis on giving people to choice where to place these trusts ”Rather, the goal of crypto is to give people access to cryptographic and economic building blocks that give people more choice in whom to trust, and furthermore allow people to build more constrained forms of trust.”
Verite in essences “”a set of decentralized identity standards developed with support from Block, Circle, Coinbase and Centre, as well as other leading blockchain and crypto projects, that enables organizations to issue and verify digital identity credentials for users and institutions participating in the crypto economy.” […] Circle is already taking steps to build solutions for issuing and verifying KYC credentials for individuals and institutions to participate in DeFi, working alongside trusted ecosystem leaders including Algorand, Block, Coinbase, Compound Labs, ConsenSys, Espresso Systems, Hedera Hashgraph, Ledger, MetaMask Institutional, Phantom Technologies, Solana Foundation, Spruce, and the Stellar Development Foundation—with more on the way.”
The Github Repo did not provide much info on how they plan do tie into 3rd party KYC/KYB/AML/accreditation? And how 3rs party data can be written on-chain? Similar model to oAuth 3.0 where 3rd party provides a token (simultaneously, these 3rd party credentials CPA/JD etc will be audited against a public database to make sure it’s real-time/live and take that and combine it with their analysis = token, similar to oAuth 3.0 framework) which ultimately protects the privacy of the end users/investors.
Functionally, this is operationally similar to Zelle-consortium, where top stakeholders in their respective industry comes together to form a DAO-like trust structure between the enterprise participants in that space to help establish an industry standard.
Overall, I am super excited to see industry leaders coming together to help formulate a standard of credential/credential token management which will play a critical role in the Web3 compliance space.
FinCEN Travel Rule
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