The administration of US President Joe Biden released a national standards strategy for critical and emerging technologies on May 4. The strategy states that the United States will prioritize standard-setting in eight areas. Priority areas include "digital identity infrastructure and distributed ledger technologies, which are increasingly impacting a range of key economic sectors".
"Distributed ledger" is synonymous with blockchain. According to a National Institute of Standards and Technology (NIST) document currently under review, a digital identity is "a unique representation of a subject that participates in an online transaction." The document adds that digit al identities "are unique within the context of a digital service, but do not necessarily need to uniquely identify a subject in all contexts". NIST is the federal agency that coordinates government standards activities.
One obvious use of digital identity in the economy is know-your-customer (KYC) and anti-money laundering (AML), and blockchain solutions are gaining momentum as regulators and law enforcement agencies demand enhanced AML compliance in the US and around the world Developing crypto industry. Innovations such as zero-knowledge KYC verification based on the blockchain consensus mechanism have been proposed to carry AML verification, credit scoring and similar information. Passport technology using soulbound non-fungible tokens (NFTs) has been deployed to make identities accessible off-chain. Privacy concerns are closely related to digital identity and are an area where governments and the crypto industry have yet to agree.
The goal of the strategy is to protect American consumers and the US role in setting international standards, the White House said. The strategy will step up investment in "pre-standardization research" in identified key areas, encourage private sector and academic engagement in this research, invest in training, and ensure integrity and inclusivity.
The Treasury Department's Office of Financial Research leads the government's work on digital identity, digital assets, and distributed ledger technology at federal and international agencies.
