Welcome to Crypto Long & Short, our institutional newsletter featuring insights, news, and analysis for professional investors. This week, we delve into the issue of fraud in the digital age and the potential for state-led identity systems to provide a solution.
Tricia Gallagher, founder and principal of Treasury Solutions Info Tech, argues that the current approach to digital identity is flawed and that a state-led system could help to reduce fraud and improve user control over personal data. The United States has lost an estimated $5 trillion to fraud and improper payments, with most policy responses focusing on detection and enforcement rather than addressing the underlying issue of identity. Gallagher suggests that a state-led approach could provide a more effective solution, with individuals having control over their own identity and personal data. The article also explores the current policy debates in Washington, including efforts to reduce fraud and improve consumer financial data control.
Meanwhile, Utah has introduced a Digital Identity Bill of Rights, which places individuals at the center of how their identity is used and shared. The goal is to modernize how trust is expressed, reducing reliance on centralized data and restoring individual control over identity and personal information.
Other news this week includes developments in stablecoins, with the Federal Deposit Insurance Corp. proposing its approach to U.S.
federal rules, and crypto entering geopolitical tensions as Iran explores collecting transit fees in cryptocurrency. The crypto Trading Card Game gacha market has also hit a record high, with volumes reaching over $36 million in a single week.