The XRP Ledger has implemented the Digital Identity (DID) Amendment through XLS-40, which went live on October 30, 2024, after receiving 85.71 percent approval from its validators. The amendment introduces decentralized identity management within the XRP Ledger, allowing users to control their digital identities independently from centralized authorities, addressing privacy and security concerns in digital transactions.
DIDs on the XRP Ledger work as unique identifiers for users, akin to fingerprints, facilitating identity verification without centralized oversight. The system uses a bidirectional pointer structure where a DID document links to an on-chain DID object and vice versa, preventing identity forgery.
This technical approach, developed under the guidance of RippleX, ensures that users can securely manage their identities on-chain while connecting to verifiable credentials (VCs).
This amendment comes as financial institutions face growing regulatory demands for Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance. The DID framework could streamline these processes by enabling compliance through decentralized verification, potentially reducing operational costs for institutions while preserving user privacy.
Analysts anticipate this development may advance the adoption of decentralized finance (DeFi) services, where reliable identity verification is essential.
The XRP Ledger’s DID implementation is structured around three main roles: users managing their DIDs, issuers providing verifiable credentials, and verifiers validating those credentials. This model aligns with established digital identity standards, incorporating blockchain-specific security enhancements. The DID system integrates with the XRP Ledger’s existing financial infrastructure, potentially broadening its utility in the DeFi space and beyond.
Source: ID Tech
November 12, 2024 – by the Mobile ID WorldEditorial Team
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