Billionaire Tron (TRX) founder Justin Sun has predicted that tokenized know-your-customer (KYC) checks will become increasingly prevalent as regulations tighten, while offering his own identity token that grants holders “citizenship” in Dominica’s metaverse.
In an interview with Decrypt, Sun speculated that decentralized exchanges (DEXs) like Uniswap in the future will require KYC verification for on-chain users, and that they will also need to obtain licenses to ensure compliance with travel rules and anti-money laundering (AML) regulations.
“In the future, we will probably have these kinds of licenses for decentralized exchanges,” Sun was quoted as saying.
To address these potential requirements, Huobi, an exchange partly owned by Sun, has introduced the Dominica Metaverse Bound Token (DMBT).
The token is part of the Dominica Metaverse Digital Citizen (DMDC) program and offers tokenized identity for users who have completed tier 3 KYC verification on Huobi, which requires facial recognition, personal information, and pictures of a national ID.
“Citizenship” in the metaverse
Issued on the Tron blockchain, the DMBT token grants its holders “citizenship” within the Dominica Metaverse, and doubles as a government-issued ID for the Commonwealth of Dominica.
Dominica is a Caribbean island nation with a population of less than 100,000 people.
Huobi’s embrace of Dominica’s digital government-issued ID is not a new thing, and media reports in the past have speculated that it could offer a way for the exchange to bypass a ban on crypto trading for mainland Chinese users.
“People familiar with the program said Chinese users will be able to trade on Huobi’s platform if they register for Dominican digital citizenship,” a report from the Wall Street Journal from March said, while sharing a screenshot that directs Chinese users to apply for Dominican digital citizenship.
Judging from Sun’s latest comments, however, the controversial crypto entrepreneur now believes that the new identity token could also have broader potential in the digital economy, and that protocols like Compound, Uniswap, and dYdX could use it for their own identification purposes.
According to Sun, the benefits of the approach is that it ensures decentralization and self-custody of digital assets while meeting KYC and AML requirements.
“That’s why I think there’s gonna be lots of use cases for decentralized ID,” he was quoted as saying.
This article first appeared at Cryptonews