Self-sovereign identity use cases

While self-sovereign identity (SSI) sounds like an unfamiliar concept for some, others are  actively leveraging the technology to address industry-specific challenges – take the KYC trial of the Financial Conduct Authority or the IATA Travel Pass. But before we go any  further, let’s define what SSI is. 

What self-sovereign identity (SSI) is 

Self-sovereign identity (SSI) is an emerging concept for exchanging authentic and trusted  data related to people, companies and things in a much more secure and privacy-preserving  way. Essentially, it gives individuals a verified master-copy of their own data, affording  control over what information they share and removing the need to store personal data  entirely in central databases. It could be key to unlocking access to banking, government  benefits or other services and, as McKinsey Global Institute research suggests, it could boost  economic growth by 3% in the UK in 2030. 

Do we have a problem with digital identity, sir? 

Current identity solutions largely incentivise issuing/verifying organisations (data controller)  over the individual/company (data subject). The data subject (i.e. an individual or a  company) at best has to directly pay (sometimes prohibitive) fees to acquire documents,  and at worst, often has no real control over their own data (as often in targeted  advertising). 

The bottom line is that the current identity model is fundamentally broken as it’s all built  and controlled by third-party providers rather than individuals. The result of such a set-up  from a user experience is that on average, an individual has 130 to 200 different accounts all  tied to the same email address. In many ways this makes it a paradise for threat actors, as  they can target organisations’ data silos and can use phishing and social engineering  techniques to try and trick individuals into giving away their passwords to a multitude of  accounts. Over time, data subjects have lost track of what data is being stored and by whom. 

Know Your Customers and Finance 

When it comes to use cases, SSI has a variety of applications and arguably one the most  known within the Banking sector is Know Your Customer (KYC). Most processes that touch  finance usually request user identity verification, such as transactions that require payment.  SSI enables a reusable KYC concept that offers a much more seamless way of ID verification.  When an ID verification is needed, more often due to compliance or regulatory pressure, SSI  can significantly reduce the friction for users improving a customer experience whilst providing a compliant service. In short, current KYC is ‘single-use’, whereas SSI makes KYC  ‘recyclable’. 

However, friction reduction goes beyond the Business to Consumer (B2C) space and applies  to the Business to Business (B2B) use cases. SSI also provides traceable and auditable  personally identifiable information (PII). Finally, as it’s also applicable across-industry, SSI  ultimately speeds up the onboarding process for new customers and improves security by  removing the unnecessary paper trail. This makes it a rather useful solution to enable  mobile banking. One of the notable examples is the UK government, which launched a trial  for its Financial Conduct Authority (FCA) using an SSI-powered solution for onboarding  users. 

SSI in Decentralised Finance and Crypto 

Moving beyond traditional banking, the Centralised Decentralised Finance (CeDeFi) also  sees a robust application for SSI. Since identity verification is equally required in both  centralised and decentralised finance, with neither satisfied with the existing KYC and  identity approaches, SSI can provide that identity layer which meets both worlds. It creates  a bridge between traditional data-heavy interactions and an anonymous DeFi approach, while CeDeFI will provide the financial infrastructure for SSI adoption in a key market. 

cheqd’s ultimate vision is to establish the payment rails for identity, initially self-sovereign  identity, without anyone needing to worry about the underlying technology. This perfectly  aligns with the CeDeFi vision of providing a spectrum of financial services without the need  

to worry about whether they are centralised, decentralised or what technology they are  built on. The blending of CeFi and DeFi also prevents the need for multiple, siloed identities,  which is the problem SSI is built to solve. Within the Crypto and DeFi space, SSI enables  peer-to-peer (P2P) transactions. Individuals can share a small piece of identity information,  i.e. a Telegram handle, to prove who they are without disclosing their identity publicly. This  means no more test payments to check wallets. Another option is doing KYC’ed loan pools  without storing the data – instead, only keeping ‘yes’ or ‘no’ answers. 

Travel and SSI 

The travel industry probably shows one of the most relatable SSI applications enforced by  the pandemic developments. International and domestic travel has always required identity  to be shared in the form of passports, visas and other documents. In the age of COVID-19,  this has been made even more complex as another layer of health certification has been  added. Take the ‘track and trace’ system, for instance; one of the biggest downsides is that a  lot of personal information is shared with a vast number of third parties. One of the projects  in this space is the Covid Credentials Initiative, which aims to develop ‘privacy-preserving  verifiable credentials’ to spread the virus through the use of SSI.

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Airlines are actively testing global credentials to verify health passports using SSI and digital  identity with the International Air Transport Association (IATA) developing IATA Travel Pass.  It stores encrypted data, such as verified test and/or vaccination results on the traveller’s  mobile device, meaning it’s fully decentralised as there is no central repository for this  information. 

NFTs and SSI 

In a nutshell, self-sovereign identity helps to prove who created, owned and/or currently  owns Non-fungible Tokens (NFT) across their lifecycle as well as providing ownership of  fractions. SSI can solve the provenance issue regardless of the ledger NFTs are hosted on.  SSI can enable a fully decentralised content consumption with payment and identity – in  other words, consumption of media/content directly from the creator without a distribution  channel. This can help creators to receive fair payments for their work and interact with  their audiences directly. Another issue that self-sovereign identity can address is identity  tied to payments. There is currently no way to verify the identity of the payment receivers in  Crypto/ DeFi transfers beyond the wallet address. It’s a problem even for low-volume  transfers, but increasingly more so on high-value transfers. Whilst there is always a need for  anonymous payments in Crypto, there are occasions when it’s useful to verify who is  receiving funds. 

Other SSI use cases 

While the list can go on, especially as various industries join the bandwagon and pick up the  technology, there are a few notable examples. Decentralised storage is getting more  traction as SSI can be implemented to manage participants’ data and store distributed files  with decentralised access control. Decentralised identity and the technical standards  involved (Verifiable Credentials and Decentralised Identifiers) can also be used for: 

– E-commerce: besides increasing transactional security and preventing potential e commerce fraud, it reduces onboarding and payment frictions. A few examples of  existing projects include Barclaycard and OpenBazaar. 

– Corporate or organisational identity: making it easier to trust companies one is  interacting with, especially over the internet. For instance, Bosch is participating at 

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the The IDunion network’s project that develops an internationally deployable SSI  application for corporate identity and master data management. 

– Product or package identity: enabling more efficient and effective track and trace for  real-world supply chains. The global blockchain supply chain market size is projected to reach circa $9,852 million by 2025, with a growth of more than 80% from 2018 to  2025. 


The beauty of this technology is that it addresses issues that are universal and applicable  across industries. With more and more companies leveraging SSI, the list of use cases will  grow fast, making SSI a reality in the very near future.