The crypto wallet used to be no more than a key to store coins. Now, the wallet is evolving into a full-fledged identity container, holding reusable credentials such as KYC checks, diplomas, and licenses that can accompany users across apps and chains.
This shift is coming at a timely moment. The European Union’s Digital Identity Wallet is slated for rollout in 2026, requiring EU countries to issue interoperable digital IDs. In parallel, projects like Moca Chain, launched under the umbrella of Animoca Brands, are building blockchains purpose-built for decentralized identities, holding the promise of user ownership, interoperability, and privacy through zero-knowledge proofs. The convergence of policy momentum and technological innovation is making digital identity one of the most consequential frontiers of the Web3 space.
From Storage to Passports
Arthur Breitman, founder of Tezos, believes wallets are about to undergo a fundamental transition. “A wallet is no longer just a vault for assets,” he says. “It can become a passport that proves you are of age, or that you hold a certain certification, without ever exposing personal details.”
This idea reflects the growing shift toward verifiable credentials, where identity information is packaged as cryptographic proofs rather than raw data. Breitman adds that portability is the key: “Once identity becomes portable, the friction of re-verification disappears. That is a breakthrough not just for compliance, but for everyday convenience.”
Europe and Hong Kong’s Big Push
Europe is setting the tone for regulatory frameworks. The EU Digital Identity initiative and the MiCA regulation are pushing governments and enterprises to adopt standardized, interoperable approaches to both money and identity. And it isn’t just Europe. In Hong Kong, the HKMA recently launched a cross-boundary data validation platform to streamline identity verification in cross-border finance, highlighting how jurisdictions worldwide are racing to make digital identity portable and trusted.” For Web3, that alignment could open doors for the crypto wallet and decentralized identity solutions to double as an official ID, with the flexibility to function across decentralized apps and traditional institutions alike.
Moca Chain’s model emphasizes privacy by design, with credentials verified using zero-knowledge proofs so that no raw personal information is shared. That approach is designed to avoid the pitfalls of centralized ID systems that expose user data to breaches or surveillance. By ensuring that identity remains self-sovereign, users can decide when, how, and with whom to share proofs.
Other innovative approaches include prominent players such as Terminal 3 and OpenDID. Terminal 3’s decentralized private data network empowers businesses and governments to issue cryptographic credentials that allow identity claims to be verified across platforms and across borders, without personal data ever being revealed. These ‘smart credentials’ are freely composable, quantum-resistant, fully customisable, and can be issued from any private data source. OpenDID is an infrastructure that connects all major cryptography-based digital identity and decentralized identifier (DID) systems, routing encrypted messages between identity and business systems, in a design similar to SWIFT as a messaging backbone but for identities.
Frictionless Onboarding
For identity to be usable at scale, it has to integrate seamlessly into daily experiences. That is where Vyvo comes in. Vyvo is a digital health platform that pairs wearables with blockchain to transform biometric and lifestyle data into verifiable identity credentials. “Imagine proving your health status or fitness compliance without handing over your entire medical history,” explains Hakan Kozakli, Vyvo’s CTO. By linking health data to decentralized identity, Vyvo illustrates how credentials can span far beyond finance into wellness, insurance, and employment.
When Identity Becomes Income
The next step in identity’s evolution is monetization. Rather than intermediaries capturing value when identity is verified, users could receive direct economic rewards. This “data financialization” flips the script, treating identity as an asset that can generate income. Breitman sees this as inevitable: “The ability to monetize verification events creates incentives for individuals to control their data more carefully. It also creates entirely new marketplaces around identity.”
Moca’s roadmap explicitly includes this vision, positioning reusable identity credentials not only as tools for compliance but as assets that can be monetized every time they are verified. That could turn routine checks into economic events, rewarding individuals for the value of their digital presence.
What Comes Next
The building blocks are falling into place: regulatory clarity in Europe, purpose-built blockchains like Moca Chain, and applications such as Vyvo that show how identity can be applied across industries. The challenge ahead is making these systems interoperable, user-friendly, and economically compelling.
If wallets truly become passports, and if identity verifications can become income-generating events, then digital identity could shift from being a bureaucratic necessity to a financial opportunity. For users, that means more control, more privacy, and perhaps even more upside from something as simple as proving who they are.
