Digital identity is no longer just a technical layer, it’s becoming the foundation of how people and organizations establish trust online.

This month, we spoke with Ivette Cano, Chief Marketing Officer and Niza González, Head of Data at Key State Capital, an early-stage venture firm and ecosystem catalyst driving innovation in decentralized identity.

From their work mapping the entire ecosystem through the Web of Trust Map to investing in startups and protocols that define the next era of trust, they share their perspective on how decentralized identity can reshape governance, security, and collaboration in the digital age.

From governance to digital identity, building the next trust infrastructure

Question 1 (Q1). Let’s start with you! What led you into the digital identity space, and what role does Key State Capital play? 

Ivette: I’ve always been interested in how governance systems work: how societies create trust, enforce rules, and enable cooperation. When I looked at the digital world, I realized that identity is one of the most fundamental governance systems we have, but it hasn’t kept pace with the speed of the internet’s evolution. The tools we rely on (passwords, paper IDs, and centralized databases) are fragile, easily tampered with, and poorly suited for a global, digital economy. Decentralized identity represents the next evolution of governance systems, aligning trust and accountability with the realities of the digital age.

Niza: I entered the digital identity space through my work as Head of Data for the Web of Trust Map, a research initiative mapping decentralized identity. It was my introduction to the ecosystem, and it gave me a comprehensive overview of all the players, standards, and emerging trends shaping the field. What initially drew me in was the concept of self-sovereignty, particularly from the holder’s perspective and the efficiency it could bring to everyday interactions. As I explored the different use cases and the principles behind the technology, it became clear to me that decentralized identity can be applied across many contexts, but its true value lies in doing so with privacy and security as the foundation.

At Key State Capital, we position ourselves as early-stage investors, ecosystem builders, and conveners in the digital identity (especially decentralized identity) domain. We back startups and protocols in verifiable credentials, self-sovereign identity, zero-trust infrastructure, and interoperability. Beyond investment, we created the Web of Trust Map, an open-data initiative mapping over 250 projects across the world. This dual role of capital provider and ecosystem catalyst positions us to accelerate the shift toward secure, inclusive, and decentralized digital identity.

Inside the 'Web of Trust Map' and the future of digital identity infrastructure

Q2. Can you tell us more about this initiative, Web of Trust Map? How did the idea come about, and what story does this map tell about where the industry is heading?

Niza: The idea behind the Web of Trust Map comes from recognizing a major gap in public understanding of decentralized identity, specifically around the technology, its protocols, and the organizations leading its evolution. We wanted to create a single, open resource that visualizes how the ecosystem has evolved and who’s shaping it. By doing so, we hope it serves as a foundation for deeper research and analysis in the field. 

This map already reveals key patterns: 2020 was clearly a turning point, with rapid growth followed by a shift away from fully decentralized approaches toward more practical, but less secure, protocols such as did:web. Even though this approach simplifies adoption, it relies on the central dependencies and security risks of DNS and hosted services. In some regions, like in Europe, we see a more hybrid version emerging, with the EUDI Wallet Framework, more pragmatic, and prioritizing interoperability, compliance, and large-scale deployment. However, it relies on EU trusted lists and certification frameworks instead of decentralized registries, relying on centralized systems to resolve keys tied to identifiers. So, while the space has expanded, the data shows there’s still a long way to go in aligning back to the original principles of self-sovereign identity.

Q3. From your research, what do you think is still preventing digital identity from being widely adopted (fragmentation, lack of understanding...)?

Niza: Although the industry has grown significantly, 173% from 2020 to Q2 2023, fragmentation remains a major obstacle, particularly at the DID method level. There are now over 130 DID-methods, each defining how decentralized identifiers (DID) are created, resolved, updated, and deactivated on specific systems or ledgers. This diversity could be healthy for innovation, but without common standards for interoperability, it becomes a barrier. This means that a DID created under one method (e.g. did:indy) may not be verified or recognized in a system that only supports another method (e.g. did:web or did:webvh). As a result, the ecosystem becomes siloed, making it difficult for verifiers, issuers, and holders to interact seamlessly, which ultimately slows down adoption.

Another major gap lies in sustainability. The sunset of Sovrin, once one of the most widely adopted Hyperledger-based identity networks, illustrates how fragile some projects can be when they lack long-term governance models or financial sustainability. Many initiatives rely heavily on grants or short-term funding cycles, which can undermine trust and continuity, both essential for critical infrastructure like identity systems.

While there are dozens of use cases, from finance and education to creative industries, not all of them solve an urgent, tangible problem for users. For digital identity to reach widespread adoption, it must address a pain point that makes everyday life meaningfully easier, safer, or more efficient. When a solution becomes clearly beneficial or even inevitable for a certain group of people, adoption follows naturally. In other words, decentralized identity stops being a “nice to have” and starts being an indispensable tool that improves how people interact, transact, and trust online.

Digital identity adoption: Global trends, challenges, and why companies can’t wait

Q4. We’re seeing more and more digital identity initiatives led by governments, consortiums etc. Yet only a few early-adopters. Why should companies start moving faster?

Ivette: Nearly 90% of businesses report losing up to 9% of their revenue to fraud, with global fraud losses exceeding $5.13 trillion annually. This highlights the urgent need for stronger protections. Digital ID has emerged in response to the growing need for trust, security, and efficiency in a world where more and more of life happens online. Yet digital ID adoption alone is not enough: it must be secure, authenticated, confidential, and decentralized. Embracing decentralized digital identity is like taking out “privacy insurance”, preparing organizations to stay resilient against data breaches, fraud, and future risks. 

By contrast, centralized digital identity solutions often introduce new vulnerabilities by creating massive honeypots of sensitive data, as seen with Aadhaar. The way forward is decentralized, zero-trust models that avoid these risks. A strong example is the vLEI, which uses the KERI protocol to deliver verifiable organizational identity without centralized honeypots. It ensures compliance, enables global interoperability, and builds a trusted, future-proof foundation for the digital economy.

Q5. You’ve analyzed global trends, from Europe’s regulatory momentum with eIDAS 2.0 to Asia’s rapid pilots. What regional differences or lessons stand out most?

Ivette: We recently published the report “Web of Trust Map: The Global Infrastructure Of Decentralized Digital Identity” that underscores how globally, the landscape remains highly uneven. 

Europe, North America, and parts of East and Southeast Asia are leading the way in digital identity adoption, supported by strong institutions, clear regulatory frameworks, and substantial financial resources. 

In contrast, Latin America, Africa, Central Asia, and much of the Middle East have seen only scattered pilots or initiatives often led from abroad, limited by weaker infrastructure, less institutional backing, and scarce funding. This gap shows that decentralized identity is still shaped more by institutional capacity and concentrated resources than by widespread, organic innovation.

Q6. For companies navigating this shift, what first steps can help them engage with decentralized identity confidently and strategically?

Ivette: For companies navigating this shift, the first step is to understand what decentralized identity is truly designed to solve and assess whether that aligns with their own mission or pain points. Too often organizations approach emerging technologies as trends to follow rather than tools to address real challenges. Understanding the core problem should guide any decision to engage with decentralized identity. 

From there, companies can map potential collaborators or pilot opportunities strategically, identifying partners already active in adjacent industries or working with compatible technologies. Tools like the Web of Trust Map can help orient others looking to venture into the decentralized identity space, either as builders or users.

Approaching decentralized identity should involve the understanding of the technology’s use cases, the measurable impact it will actually have on the company, and how it can integrate to existing systems rather than replacing them all at once.

The future look of digital identity

Q7. Looking ahead to 2026, what forces do you think will shape the next phase of digital identity, and what should we expect next?

Niza: Looking ahead to 2026, several forces are set to shape the next phase of digital identity. 

With the rise of Agentic AI this year, the need for the assurance of trustworthy and accountable AI outputs, models, and interactions has become crucial. As autonomous agents and AI-generated content increasingly interact with digital systems, verification of both how and who is acting will become a major point of development. Verification will no longer be limited to organizations and individuals; it will also need to extend to the mechanisms and algorithms themselves, a shift that points toward the rise of Verifiable AI. 

Government involvement will continue to be one of the most influential. Public-sector initiatives not only drive adoption but also define the way regulations, standards, and industries evolve around decentralized identity. Understanding these government-led initiatives is essential to anticipate where adoption is heading, how companies should adapt to new legal requirements, and how interoperability is being addressed.

At the same time, the private sector remains a key driver of the technological direction. We’ve already seen this through movements like the mDL “no phone home” campaign, which successfully pushed revisions to the standard to better protect privacy. This shows how individuals and communities deeply involved in the space play a crucial role in preserving the original principle, even as adoption scales.

Next year, the discussions will remain on the EUDI Wallet launch, being a pivot year for the European Commission’s initiative as countries prepare to roll out. Meanwhile, in the United States, state-led initiatives such as the State-Endorsed Digital Identity (SEDI) program in Utah are already emerging, alongside the continued expansion of the mDLs across states. Finally, the Swiss e-ID approval will also be a highlighted topic in 2026, as the development of the ID system becomes a reality.

By 2026, we’ll likely see digital identity as a more prominent and constant conversation in mainstream services such as banking, healthcare, and travel. At the same time, debates around privacy, control, and decentralization will intensify, as stakeholders decide whether digital identity becomes a tool for empowerment or for surveillance.

Digital identity: turning possibility into reality

As the world accelerates towards a digital-first economy, trust, already being the currency, has also become the challenge. What began as a movement toward self-sovereign and decentralized identity is now shaping global standards, with governments and institutions building on the same principles to restore trust online. The rise of deepfakes and synthetic fraud has accelerated this shift, pushing governments to roll out national eID schemes in over 190 countries, while new regulations like eIDAS 2.0 in Europe start enforcing their use.

This marks a turning point: by 2029, 1.5 billion people will use a digital ID as part of their daily lives. Yet for businesses, connecting to this growing ecosystem remains complex. Fragmented standards, local integrations, and technical barriers slow adoption and limit the benefits of secure, verifiable identity.

At Hopae, we make this connection simple and seamless. We’re building the leading global eID hub, linking organizations to over 100 digital ID schemes through one trusted infrastructure. As eIDs become the new standard for security and convenience, we ensure that trust is not only built, but accessible.