Welcome to Crypto Long & Short, our weekly newsletter for professional investors. This week, we're discussing the future of digital identity and how it can help prevent fraud.
The US has lost an estimated $5 trillion to fraud and improper payments, with most policy responses focusing on detection and enforcement rather than addressing the root issue of identity. Tricia Gallagher, founder of Treasury Solutions Info Tech, argues that the solution lies in a state-led approach, where individuals have control over their personal data and identity. The current system, where data is collected and monetized by banks and tech platforms, is inefficient and prone to misuse.
Gallagher suggests that states can lead the way in creating a new digital identity framework, one that prioritizes user control and privacy. The state of Utah is already taking steps in this direction, with the introduction of a Digital Identity Bill of Rights that puts individuals at the center of how their identity is used and shared.
This approach has the potential to reduce fraud, improve transparency, and strengthen accountability. As the debate around digital identity continues, it's clear that states have a critical role to play in shaping the future of digital finance.
Other news this week includes the Federal Deposit Insurance Corp's proposal for US federal rules on stablecoins, and the growing trend of crypto trading card games. Our chart of the week shows the surge in crypto TCG gacha volumes, with the CARDS token increasing by 52% in the last 24 hours.