IOTA Web3 ID Solution Selected by the European Blockchain Sandbox

The IOTA Foundation announced that the European Blockchain Sandbox selected its novel Web3 Identification Solution.

The European Blockchain Sandbox has selected the novel Web3 Identification Solution offered by the IOTA Foundation. This technology provides a tokenized solution that enables users to easily and securely fulfill the diverse Know-Your-Customer (KYC) requirements set forth by centralized and decentralized applications (dApps).

The platform, which is a joint effort between IOTA, HAVN, walt.id, and Bloom Wallet, converts user credentials into soulbound tokens that can be used to attest to their identity, achievements, or personhood in verification protocols.

IOTA's participation in the European Blockchain Sandbox will facilitate the testing and validation of its technology within a controlled and regulated environment. The sandbox is highly selective, accepting no more than 20 projects for participation each year.

The IOTA Web3 ID Solution is designed to address the complexities, high costs, and privacy concerns associated with traditional KYC processes. The tokenized model provides users with a reusable KYC system that also grants them sovereignty over their data.

Furthermore, soulbound tokens enable users to safeguard their information from malicious network actors by keeping it off-chain.

Despite its multi-layered design for optimal data protection and privacy, IOTA's Web3 ID Solution boasts streamlined onboarding procedures for ease of use.

Initially, the user undergoes remote identification via IDnow, a verification platform that ensures compliance with Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) standards.

Following user verification, walt.id tokenizes the credentials authenticated by IDnow, transforming the extracted data into a soulbound non-fungible token (NFT).

Finally, the user can add the token to a compatible wallet, such as the Bloom omnichain wallet.

These tokens can be used by users in either human-controlled or automated verification processes. As the tokens themselves attest to the holder's credentials, they can be used without disclosing any personal information.

The only exception to this privacy measure is if an authorized entity, such as law enforcement, has the legal authority to access the information stored within the token. In such cases, the owner can also request the token's revocation, for instance, to be removed from a government watchlist.

Alternatively, issuers can choose to convert their data into a W3C Verifiable Credential format, enabling individuals to share their data permissionlessly off the chain.