The European Commission selected Iota’s Web3 ID solution for the latest edition of its European Blockchain Sandbox initiative.
Iota’s Web3 Identification solution was chosen by the European Commission for the current edition of the European Blockchain Sandbox initiative (EBSI).
The European Commission notified the selected participants for the second cohort of its EBSI on June 13. Iota, an open-source distributed ledger and cryptocurrency ecosystem, is one of the selected projects.
Iota’s selection emphasizes its Web3 ID solution, which was created in partnership with Walt.id, IDnow, Bloom Wallet, and HAVN.
Iota stated that this decision is a significant milestone in the development of its identity solution:
“It opens the door to regulatory discussions about KYC and privacy in a Web3 environment. This is especially relevant now that many regulators are considering their approach to decentralized finance (DeFi).”
In 2023, the European Commission established the EBSI as a testing ground for distributed ledger technology (DLT) solutions across various industries.
Each cohort is comprised of no more than 20 projects, which are subsequently provided with a controlled environment for testing and validation, as well as the opportunity to engage directly with regulators from across the European Union.
Alongside Iota, the RealEstate.Exchange (REX) DigiShares, the DoxyChain blockchain, which is focused on documents and business, the Hacken smart contract and blockchain security analysis project and the Origintrail artificial intelligence-centric knowledge infrastructure project are among the selected projects.
The traditional method of implementing Know Your Customer (KYC) processes, which is frequently impeded by inefficiencies, high costs, and privacy concerns, is being attempted to be reformed by Iota’s specific Web3 ID solution use case.
The solution is to enhance both security and user control over personal data by implementing a reusable KYC system through DLT and tokenization.
The developer explains that the process commences with remote identification by IDnow, which guarantees that users comply with EU Anti-Money Laundering (AML) and KYC regulations.
The verified identity is tokenized and retained in the user’s wallet as a soulbound token in the case of Iota’s Web3 ID solution.
This token can be used across a variety of Web3 applications to verify personal information without exposing it.
This occurs in the context of the EU’s ongoing efforts to establish a digital ID system. The European Digital Identity (EUDI) regulation, which was initially published in February 2023, was updated on May 21 to include full implementation requirements by 2026.
It necessitates that all citizens and inhabitants be provided with a minimum of one EU digital identity wallet by member states.
The digital ID wallet is intended for the electronic signature and storage of a variety of documents, including university diplomas and transport tickets.
It is regarded as the subsequent development in the manner in which European citizens live and labor.
Some concepts for its creation and implementation have already been discussed, including the potential use of zero-knowledge proofs.
The Open Network blockchain ecosystem has allocated $5 million of Toncoin (TON) tokens to incentivize users to verify their identity using state-of-the-art palm scanning technology, a trend that is not specific to Europe.
This signals a trend in the industry of finding a solution for digital identity in an increasingly digital world.