National and Ecosystem Approaches To Digital Identity and Wallets

This collaborative session brings together government, industry, and research leaders to explore decentralized identity, verifiable credentials, and trust frameworks across borders. It is part of the [UA DLT Forum '25 reBUIDL](https://w3i.network/ua-dlt-forum) initiative and will serve as a platform for meaningful connections and practical collaboration on digital trust building for Ukraine and beyond.

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By Speaker

Roman Kravchenko (482.solutions)

Core Thesis: Digital identity as institutional infrastructure for economic systems

• Theoretical Framework: Applied new institutional economics (Ronald Coase, Oliver Williamson) to digital identity
• Key Concept: Digital identity enables clear property rights definition, which is fundamental for economic equilibrium per Coase Theorem
• Four Conditions for Economic Equilibrium:
1. Clearly defined property rights (enabled by decentralized identity)
2. Open and competitive market structure (via DAOs)
3. Free and symmetric access to market information
4. Near-zero transaction costs (via Web3 protocols)
• Vision: Blockchain as technology for "value management" not just information management; all industrial enterprises will evolve into fintech platforms
• Practical Applications: Energy sector platforms, trusted data sharing ecosystems (I-TRUST program), industrial capital management
• Cluster Economics: Future economy based on interconnected clusters of firms rather than large centralized enterprises

Mirko Mollik (SPRIND - Germany)

Core Focus: EUDI Wallet implementation and European standardization approach

• Regulatory Foundation: EU mandates EUDI wallet by end of 2026 across all member states
• Key Strengths:
• Architecture Reference Framework provides detailed specifications
• Open source reference implementations available
• Transparent governance with public GitHub discussions
• Multiple standards organizations involved (ETSI, W3C, IETF, ISO)
• German Approach:
• Derived from national ID card via NFC
• Open source wallet and documentation
• Blueprint for ecosystem setup
• FUNKE competition approach for innovation (6 funded teams)
• Challenges Identified:
• No clear business model for wallet providers (must be free for citizens)
• Interoperability stops at EU borders
• Long process to onboard non-EU countries
• Standards allow variations that can break compatibility
• Trust Model: Hierarchical PKI-based system with liability guarantees for verifiers

Darrell O'Donnell (Ayra Association)

Core Mission: Building global digital trust network infrastructure

• Problem Statement: Trust is plummeting globally; AI is accelerating this decline
• Ayra's Approach: Member-owned Swiss nonprofit creating "trust layer for the internet"
• Governance Model:
• Equal representation between commercial and non-commercial members
• Includes civil society, governments, ecosystems, individuals
• "Composable governance" - thin base layer with specialized networks on top
• Technical Components:
• Trust Registry Fabric (the "who")
• Conformance Test Suite (the "how")
• Ayra Card protocol for simple credentials
• Key Insight: "Terms and Tech" approach linking business/governance requirements with technology
• Interoperability Philosophy:
• Not prescriptive about single standards
• Focus on verification point as interoperability layer
• Supports multiple tech stacks if business-governance aligned
• Liability Model: Varies by transaction value and risk; governments provide low-liability ID, commercial intermediaries step in for high-value transactions

Oleksandr Brezhniev (Privado ID)

Core Focus: Privacy-preserving identity with zero-knowledge proofs

• Key Principles:
• Self-sovereign identity (user controls data on device)
• Privacy by default (ZK proofs instead of raw data)
• Pairwise identifiers (different ID per counterparty)
• Open source and W3C standards compliant
• Technical Approach:
• ZK-SNARKs circuit-based (not just selective disclosure)
• Can prove complex statements (age + non-sanctioned country simultaneously)
• On-chain and off-chain verification
• NFC passport scanning generates verifiable credential on-device
• Use Cases:
• Bot/sybil protection with uniqueness checks
• Know Your Agent (AI agent identity/reputation)
• KYC for blockchain/RWA tokenization
• Age verification (EU Blockchain Sandbox project)
• Privacy Innovation: Data never leaves device for NFC-enabled documents; end-to-end encryption even in web wallet
• Challenge Identified: Current standards lack privacy-preserving primitives (signatures, revocation methods)

Cross-Cutting Discussion Themes

1. National vs. Ecosystem Models Trade-offs

Consensus: Both needed, serving different purposes

• National strengths: Legal liability, regulatory enforcement, established trust roots, faster initial deployment within jurisdiction
• Ecosystem strengths: Global interoperability, independence from single jurisdiction, innovation flexibility, resilience
• Vulnerability consideration (Brezhniev): Centralized systems subject to attacks; Ukraine's recent cyber incident showed need for decentralized backup

2. Interoperability Challenges

Hardest Problems Identified:

• Not purely technical: Standards exist but allow too many options/interpretations
• Business/governance drivers needed: Must clarify what problem you're solving before picking tech
• Privacy vs. standardization tension: Privacy-preserving tech (ZK proofs) not yet standardized; government certification bodies struggle with complex mathematics
• Standards maturation timeline: Took 3+ years for SD-JWT (simple approach); complex ZK methods face decade-long path
• Trust catalog problem: Anyone can publish schemas, but how do verifiers know which issuers to trust?

Proposed Solutions:

• Separate credential schemas from trust registries (who's authorized)
• Trust service providers curate authorized issuers
• Verification point as interoperability layer (verifiers handle multiple formats)
• Crypto-agile systems that can swap algorithms

3. Governance Authority

Key Tensions:

• User sovereignty vs. acceptance: Users can share anything, but verifiers decide what to accept
• Schema proliferation: Should be open (many use cases) but need standardization for common credentials (passports, diplomas)
• Revocation rules: Government mandates needed to ensure privacy-preserving methods (market defaults to easiest, not most private)
• Multi-stakeholder balance: Combination of government, large capital holders, universities, civil society
• Liability framework: Critical for business adoption but often overlooked in tech-first approaches

4. Privacy vs. Practicality

The Privacy Gap:

• Anoncreds had strong privacy but too heavy (hundreds of MB blockchain downloads, can't run on device)
• Most "selective disclosure" still leaks metadata
• Hardware support vs. privacy features trade-off
• Quantum computing threat looming

Emerging Consensus:

• Need privacy-preserving standards mandated by regulation
• Multiple credentials can coexist (standard + custom schemas)
• On-device processing critical for true privacy
• ZK-SNARKs showing promise but standardization path unclear

5. European Model Specifics

Advantages:

• Clear regulatory framework
• Open source requirements
• Harmonized within EU
• Strong liability/trust guarantees

Limitations:

• No business model for wallet providers
• Stops at EU borders
• Long onboarding for external countries
• Must balance innovation with regulation

6. Economic/Ownership Framing (Unique to Kravchenko)

Key insight often missed: Digital identity isn't about authentication but about property rights management and transaction cost reduction. The question "who owns national wealth?" determines proper governance design.

Practical Implications for Ukraine

1. Resilience requirement: Recent cyber attacks show need for decentralized backup to centralized Diia system
2. Multiple pathways: Can pursue both national system (Diia enhancement) and ecosystem participation (Ayra, OWF)
3. Privacy-first: Opportunity to leapfrog to privacy-preserving standards rather than retrofitting
4. Reconstruction use case: Property rights, industrial capital management (per Kravchenko's cluster economy vision)
5. EU integration path: Can adopt EUDI-compatible standards while maintaining sovereignty
6. Trust anchor question: Must answer "who owns national wealth" before designing governance

Convergence Points

Despite different approaches, all speakers agreed:

• Trust registries essential for knowing who's authorized
• Open standards required but need governance to prevent fragmentation
• Privacy matters but must be balanced with practicality/adoption
• No single global system will work; need interoperable independent systems
• Verification layer is where interoperability happens, not at issuance
• Business/governance must drive tech choices, not vice versa

We are excited to invite you to our upcoming Identity & Reputation session co-hosted with the Linux Foundation Decentralized Trust community. The event is planned for November 20, 2025 7pm (Kyiv time) / 9am (PT) / 12pm (ET).

This collaborative session brings together government, industry, and research leaders to explore decentralized identity, verifiable credentials, and trust frameworks across borders. It is part of the UA DLT Forum '25 reBUIDL initiative and will serve as a platform for meaningful connections and practical collaboration on digital trust building for Ukraine and beyond.

In this meetup, we will

• Compare national and ecosystem approaches to digital identity and wallets (EUDI, OpenWallet Foundation, LF Decentralized Trust, Diia, and others)
• Share implementation lessons from public services and private sector pilots
• Map trust, governance, and interoperability challenges across jurisdictions
• Identify near-term pilots for relevant use cases

Format

Interactive online session (2)

• Lightning talks (2-4 lightning talks)
• LF Decentralized Trust: State of decentralized trust and wallet architectures
• EUDI and career wallet updates (EU)
• Ukraine’s Diia and verifiable credentials
• 2 of relevant services: Besu, MIT academy ID, Dutch Career Wallet, Bhutan?
• Panel discussion
• Unconference-style breakout rooms / networking mixer
• Follow-up report to all registrants with recording and notes

Speakers

LF

Max

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