I have long argued that the growing adoption of distributed ledger technology will be reflected in the tokenisation of money and of digital identity.
Money plays an essential role in every transaction, and bringing it onto a distributed ledger technology (DLT) network is crucial to reaping the efficiencies this technology offers. Regulations in this area already exist, and various alternatives are becoming viable, such as tokenised deposits, e-money tokens, central bank digital currencies (CBDCs), stablecoins and Bitcoin, among others.
Digital identity is another fundamental component of the markets’ transition to DLT. This technology gives us the ability, to a greater or lesser extent, to control our own data, identify ourselves by means of specific attributes, properly manage the ownership of digital assets and reduce cyber risks. In the European Union, regulation in this area is about to become a reality: the European Digital Identity Regulation (eIDAS 2), covering attributes for all natural and legal persons, is expected to be finally adopted and published in the first half of 2024.
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