Why Trust, Not Tokens, Will Decide the Future of Finance

By Peter Klein

For the past decade, we’ve been focused on digital money: stablecoins, CBDCs and Tokenized deposits. But money isn’t the bottleneck. Identity is. 

David Birch made that point a decade ago in his book Identity Is the New Money (2014). Faster payment rails don’t solve fraud, onboarding friction, or compliance costs. What slows financial systems down isn’t moving balances, it’s proving who’s moving them.

Identity Is Becoming Financial Infrastructure

Across the world, the momentum is building. The EU’s EBSI project is anchoring verifiable credentials for companies and citizens, while the Nordics have long shown what’s possible with BankID and MitID, enabling secure banking, tax, and payments at national scale. India Stack, anchored on Aadhaar, powers universal digital identity, eKYC, digital signatures, and real-time payments through UPI. Singapore’s Singpass gives citizens access to over 2,000 services, blending convenience with strong authentication. And the UK’s CFIT initiative is actively working on scalable digital ID frameworks for individuals and SMEs.

The pattern is unmistakable. Digital identity is evolving into financial market infrastructure. Without it, institutions drown in fraud controls, duplicated onboarding, and rising regulatory risk. 

And Stablecoins without trusted identity are like poker chips. They move quickly but mean little outside the game. Regulators may not have the full blueprint yet, but rising fraud losses, compliance failures, and pressure to protect consumers will push them to demand identity rails alongside money rails. Chains that lack identity from the ground up will struggle to bolt it on later. Retrofits create weak trust, clumsy user experiences, and little credibility. Identity is now a key focus in the U.S. consultation period on stablecoin regulation. IDEMIA’s October 2025 response paper highlights this shift, setting out how verifiable identity could form the foundation of future regulatory frameworks.

Concordium: Building Trust Into the Protocol 

This is where Concordium has an angle. It isn’t just another L1. It was designed and built with identity and compliance embedded into the protocol itself from the beginning.

• Protocol-Level Identity: Every account is tied to an approved identity provider, using selective disclosure and zero-knowledge proofs. That means you can prove a credential without exposing all your data.

• Stablecoin-Native Design: Concordium supports Protocol-Level Tokens (PLTs), allowing stablecoins to launch without fragile smart contract dependencies.

• Checks and Balances: Only authorized processes with multiple privacy guardians can unmask identities in the case of illicit activity. No single entity has control. 

• Practical Apps: Concordium ID is an app that lets users manage credentials and share proofs. Age-verification is powered by zero-knowledge proof technology.

All of these features address the problems regulators and banks are currently grappling with: fraud, onboarding costs, data misuse, and compliance pressure. Concordium offers a working model, not an add-on.

From KYC to KYA

And this isn’t just about verifying people. The trust challenge will get bigger as AI agents start entering financial workflows, executing trades, managing contracts, and even allocating capital. That’s KYA: Know Your Agent. But before they can act, they must be trusted: trusted to represent someone real, and trusted to act within limits, leaving a verifiable trail. 

Work on shared agentic standards is already underway. Initiatives like the Agentic Interoperability Alliance are trying to establish a common baseline for how autonomous agents can authenticate, operate, and transact safely. Most approaches still assume centralised registries or third-party validators. Concordium takes a different route — building trust enforcement into the protocol itself, not layering it on after the fact.

Extending Concordium’s identity framework to agents wouldn’t be a pivot, rather it’s the logical next step –  and a real opportunity to shape how agentic finance works in practice. Concordium’s identity layer is already proving itself through use cases like the integration with  Ledger, which will enable age-gated, identity-verified transactions using zero-knowledge proofs. 

The Network Effect of Trust

Still, no single framework will win on its own. Adoption depends on common standards and interoperability with systems like EBSI, national IDs that solidify trust across borders. Features don’t equal adoption. Regulators move slowly. Banks are conservative. Identity politics is messy. But Concordium has something few others have: a live, protocol-level system that proves auditable verification and money can coexist without breaking privacy.

The implications go well beyond payments. Think supplier verification, carbon markets, trade finance, credit on identity. In each case, the money only moves when the identity checks out. This is what Birch foresaw: identity itself becoming the new currency, carrying the trust that lets value flow.

What the Industry Needs to Get Right

The next frontier may not be another chain or payment rail at all, but the trust layer that connects them. And if we want identity to become the trust layer of finance, and not just a compliance afterthought, several things must fall into place: 

• Standards before scale: We need broadly accepted frameworks for digital identity that work across jurisdictions, sectors, and applications — not one-off solutions locked into national ecosystems or proprietary stacks.

• Contextual disclosure: Identity systems must allow users to prove specific things – age, accreditation, authority – without exposing everything else. Zero-knowledge proofs aren’t optional, they’re essential.

• Embedded governance: Trust needs rules. Systems must define how credentials are issued, verified, and (when needed) revoked – with safeguards that prevent unilateral control or abuse.

• Agent trust: As autonomous agents and AI start moving money and making decisions, verifying who or what is acting becomes urgent. KYA (Know Your Agent) can’t rely on centralised gatekeepers.

• Privacy by design: Regulators and institutions will not embrace systems that compromise user control or data protection. Privacy must be engineered, not promised.

Concordium has already made design decisions that reflect these principles — not as features bolted on later, but as part of the foundation. It’s not the only answer, but it’s one of the few projects showing how this can actually work in practice.

So, the real bet isn’t which token wins. It’s which infrastructure can turn identity into trust at scale. That’s the missing piece; the real bet. And is where the next decade of finance will be decided. The conversation is shifting from speculation to infrastructure. If you’re building for regulated digital finance, Concordium should be on your radar. 

About the Author

Peter Klein is a former Mastercard EVP and seasoned financial services executive with deep expertise in payments, strategy, and blockchain. Now an active investor and advisor, he helps scale ventures at the intersection of money, compliance, and technology. With a track record of building and transforming businesses across finance and fintech, Peter brings both thought leadership and commercial edge to high-stakes growth and innovation. 

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