Building a Web3 Identity Solution
TL;DR:
The European Blockchain Sandbox has concluded its second cohort, featuring IOTA Foundation’s Tokenized Know Your Customer Solution with IDnow, walt.id, and Bloom Wallet. The Sandbox provided key lessons on compliant and privacy-preserving identity verification in Web3, including the use of off-chain verification, soulbound tokens, and GDPR-aligned wallet and node practices.
We’ve completed our participation in the European Blockchain Sandbox, a three-year initiative by the European Commission that gives innovative distributed ledger projects the chance to test their solutions with regulators across Europe. Each year, 20 projects are selected to join, and the IOTA Foundation was part of the second cohort, which ran from June 2024 to March 2025.
Our contribution focused on the Tokenized Know Your Customer (KYC) Solution, developed together with IDnow, walt.id, andBloom Wallet. This proof-of-concept solution lets users verify their identity off-chain and receive a tokenized proof in their wallet. This allows dApps, exchanges, and other services to confirm eligibility requirements (such as age verification) without exposing sensitive data on-chain.
