US Treasury Exploring Digital Identity Verification for DeFi Security

The US Department of the Treasury is exploring the use of digital identity verification to combat illicit financial activities within decentralized finance (DeFi). Seeking public input on this innovative approach, the Treasury outlines plans to embed identity checks into DeFi smart contracts. This proposal aligns with the newly enacted Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) which directs the Treasury to investigate new compliance technologies like programming interfaces, artificial intelligence, digital identity verification, and blockchain monitoring.