Japanese private companies have begun exploring decentralized identities and are forming a consortium to lead the joint effort.
Eight companies came together to launch a digital identity (DID) and verifiable credentials (VC) co-creation consortium (DVCC) to explore new use cases. The companies include banking giant MUFG (NASDAQ: MUFG), law firm Anderson Mori and Tomotsune, and several Web3 companies including Fujitsu (NASDAQ: FJTSF), ITOCHU (NASDAQ: ITOCF), TOPPAN Digital and NTT Data (NASDAQ: NTTDF). .
The consortium aims to provide self-sovereign identity functionalities, giving users more control over their data. The private DID project could have several applications in the local economy, including streamlining Know Your Customer (KYC) processes in the financial world.
The initial group of companies participating in the DID project encourages other companies to join the consortium. The consortium set out a wide network and urged education companies, blockchain-based companies and financial service providers to join the competition.
The participation of Japan’s largest commercial bank confirms speculation that the product will have applications in the financial markets. There are also rumors that the DID project could play a central role in digital securities and digital currencies, especially with the KYC process involving stablecoins.
Japan’s stablecoin rules came into effect in June, allowing financial institutions to issue stablecoins. With the new legal and regulatory clarity, MUFG has moved to build Progmat Coin, a platform designed to facilitate the issuance of stablecoins on various publicly distributed ledgers such as Ethereum (NASDAQ: ETH), Polygon (NASDAQ: MATIC-USD) and Avalanche (NASDAQ) to support. : AVAX-USD).
Although the project has not yet gone live, the issuance platform has onboarded several Japanese entities, the latest of which is banking giant Mizuho Financial Group (NASDAQ: MZHOF).
Beyond the financial world, experts argue that a digital identity project will have applications in the metaverse, allowing users to “build real societies” while exerting control over the data they choose to share. Fujitsu, MUFG and TOPPAN are founding members of the Japan Metaverse Economic Zone, a consortium exploring Web 3 and metaverse interoperability.
Digital identity is causing a storm of regulations
As digitalization permeates every facet of the global economy, digital IDs are rapidly becoming popular, with the Philippines Twala, the National Payment Corporation of India (NPCI) and Argentina exploring solutions in this area.
Privately run digital ID offerings such as Worldcoin have led to increased regulation in several jurisdictions, with Kenya, Germany and Argentina opposing the iris scanning project. They claim that the project’s data collection and processing methods may violate existing legal provisions, with Worldcoin denying any wrongdoing.
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