- Crypto wallets are evolving from simple asset storage tools into containers for digital identity credentials.
- The European Union plans to roll out its Europe-fit-digital-age/european-digital-identity_en” target=”_blank” rel=”nofollow noopener noreferrer”>Digital Identity Wallet in 2026, requiring countries to provide interoperable digital IDs.
- Projects like Moca Chain and new regulations in Europe and Hong Kong are advancing standardized and privacy-focused digital identity systems.
- Decentralized credentials, such as those supported by zero-knowledge proofs, allow users to control when and how they share their data.
- Reusable digital credentials may soon allow users to earn income when their identity is verified, turning identity verification into an economic opportunity.
Crypto wallets are now being developed to do more than store cryptocurrencies; they are becoming digital identity containers holding credentials like Know Your Customer (KYC) checks, diplomas, and licenses. The European Union is preparing to require all member states to issue interoperable digital IDs as part of its Digital Identity Wallet rollout in 2026.
Alongside policy changes, organizations like Moca Chain—backed by Animoca Brands—are building blockchains specifically designed for decentralized identity management. These new systems use advanced privacy technologies such as zero-knowledge proofs, which allow users to prove something about themselves (like age or certification) without exposing detailed personal information.
Tezos founder Arthur Breitman explained, “A wallet is no longer just a vault for assets. It can become a passport that proves you are of age, or that you hold a certain certification, without ever exposing personal details.” He noted that portability of identity credentials removes the need for repeated verification and adds convenience.
European regulations such as the MiCA regulation and Hong Kong’s new cross-boundary data validation platform are encouraging governments and enterprises to create digital identities that are trusted and usable across multiple jurisdictions. This drive toward standardization could enable crypto wallets and decentralized identity solutions to function as official IDs for both decentralized apps and traditional services.
Other solutions, such as Terminal 3 and OpenDID, provide businesses and institutions with tools to issue and verify cryptographic credentials without exposing personal data. For instance, the Terminal 3 decentralized private data network allows identity claims to be confirmed across borders, while OpenDID connects various digital identity systems for secure message routing.
Digital identity credentials are expanding into new areas. Vyvo, for example, links wearable health technology with blockchain so that users can generate verifiable health credentials. Vyvo CTO Hakan Kozakli stated, “Imagine proving your health status or fitness compliance without handing over your entire medical history.”
A new approach known as “data financialization” could turn traditional identity verification into a revenue stream for individuals. According to Breitman, “The ability to monetize verification events creates incentives for individuals to control their data more carefully. It also creates entirely new marketplaces around identity.” Moca Chain’s plan includes monetization, allowing users to earn income each time their reusable credentials are verified.
As authorities finalize regulatory details and more systems develop, the digital identity landscape is poised to offer users more control, greater privacy, and new economic advantages.
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