Congressional Testimony Spotlights the Need for Secure Privacy-Preserving Digital Identity

We’d like to congratulate Alison Mangiero and the Crypto Council for Innovation on a powerful and forward-looking testimony before the House Ways and Means Subcommittee. The hearing, titled “Making America the Crypto Capital of the World,” spotlighted critical issues surrounding digital asset policy, and we’re proud that SpruceID’s work in privacy-preserving digital identity was highlighted as part of the solution.

As Alison noted in her remarks, digital assets reshape how we transfer value, access financial services, and verify identity. A key challenge in this transformation is ensuring that digital identity systems are secure, interoperable, and resistant to evolving threats like deepfakes generated by AI. That’s where blockchain-based approaches can play a defining role.

“Today, for less than $15, artificial intelligence can generate images of people and fake IDs that can fool current identity verification security solutions. But companies, like SpruceID, are working on applications of blockchain and cryptography that have security features that even AI cannot break.” - Alison Mangiero, Crypto Council for Innovation

Why Identity Is Core to Crypto

At first glance, identity and crypto may seem like separate domains, but they are deeply connected. Blockchain-based systems, by design, enable trust without intermediaries. But to participate in real-world applications, such as opening a financial account, signing a contract, or receiving government benefits, users still need a secure way to prove who they are. Privacy-preserving digital identity provides that missing link.

Using cryptographic credentials that can be selectively disclosed, individuals can prove facts about themselves (like age or residency) without oversharing personal information. This aligns with the values of the crypto ecosystem, like decentralization, privacy, and user control, while also addressing urgent needs around fraud prevention, compliance, and equitable access.

Real-World Deployment at Scale

This work is already happening. The California Department of Motor Vehicles has issued over two million mobile driver’s licenses using SpruceID’s technology, enabling residents to prove their identity online with strong privacy protections and safeguards against synthetic fraud. California is also exploring additional ways to unlock new efficiencies in public service delivery.

Collaborating on National Standards

Beyond state-level innovation, SpruceID is working with the National Institute of Standards and Technology (NIST) and the National Cybersecurity Center of Excellence (NCCoE) to demonstrate how digital credentials, when paired with regulatory clarity from agencies like FinCEN, can streamline Know Your Customer (KYC) checks and improve compliance across the financial sector.

As digital identity becomes foundational to safe participation in the digital economy, collaboration across public and private sectors will be key.

Building the Next Generation of Public Infrastructure

SpruceID’s mention in this testimony is just one piece of a much larger effort. We’re especially grateful to the public servants and policymakers working to ensure that digital infrastructure in the U.S. is secure, privacy-preserving, and future-ready.