EU Blockchain Sandbox Selects IOTA’s Innovative Web3 ID

On June 13, the European Commission announced the participants selected for the second cohort of the European Blockchain Sandbox initiative (EBSI), with Iota being a prominent entry.

Iota, a key player in the open-source distributed ledger and cryptocurrency space, has been chosen for its innovative Web3 Identification solution. This project, developed in collaboration with, IDnow, Bloom Wallet, and HAVN, aims to revolutionize identity management technology.

Addressing Challenges of Traditional KYC Processes
The inclusion of Iota’s Web3 ID solution in EBSI marks a significant advancement in addressing the inefficiencies, high costs, and privacy issues associated with traditional Know Your Customer (KYC) processes. Iota’s approach introduces a reusable KYC system that utilizes distributed ledger technology (DLT) and tokenization, enhancing security and giving users greater control over their personal data.

In this system, the KYC process begins with remote identification by IDnow, ensuring compliance with EU Anti-Money Laundering (AML) and KYC regulations.

IOTA’s Announcement on X
Once verified, the identity is tokenized and stored in the user’s wallet as a soulbound token, which can be used across various Web3 applications to verify identity without revealing personal details.

The European Commission launched the EBSI in 2023 to provide a controlled testing environment for DLT solutions across various industries. Each cohort can include up to 20 projects, offering them practical testing, validation, and direct interaction with EU regulators.

Alongside Iota, the selected projects include diverse applications such as RealEstate.Exchange (REX) by DigiShares, focusing on blockchain solutions for real estate; DoxyChain, which targets documents and business processes; Hacken, involved in smart contract and blockchain security analysis; and Origintrail, integrating artificial intelligence into knowledge infrastructure.

A Timely Initiative Aligning with the EU’s Digital Identity Push
This initiative by the European Commission aligns with the EU’s active pursuit of a comprehensive digital ID scheme. A significant update to the European Digital Identity (EUDI) regulation on May 21 set forth implementation requirements to be completed by 2026.

This regulation mandates that member states provide at least one EU digital identity wallet to all citizens and residents for electronically signing and storing documents like university diplomas and train tickets, showcasing a forward-thinking approach to enhancing how European citizens live and work.

Additionally, the use of zero-knowledge proofs is being considered for the creation and implementation of these digital ID wallets, representing an innovative stride toward privacy and security.

Globally, the digital identity sector is witnessing widespread innovation. For instance, The Open Network blockchain ecosystem has recently allocated $5 million in Toncoin (TON) tokens to encourage users to verify their identity using advanced palm scanning technology.

This trend highlights a significant step forward in regulatory discussions and implementations surrounding KYC and privacy within a Web3 framework, as exemplified by Iota’s participation in the EBSI.


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